Correlation Between Bayview Acquisition and Olin

Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and Olin at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bayview Acquisition and Olin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bayview Acquisition Corp and Olin Corporation, you can compare the effects of market volatilities on Bayview Acquisition and Olin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bayview Acquisition with a short position of Olin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Olin.

Diversification Opportunities for Bayview Acquisition and Olin

0.47

Correlation Coefficient

Bayview Acquisition  Olin

Very weak diversification

The 3 months correlation between Bayview and Olin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Olin Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olin and Bayview Acquisition is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bayview Acquisition Corp are associated (or correlated) with Olin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olin has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Olin go up and down completely randomly.

Pair Corralation between Bayview Acquisition and Olin

Assuming the 90 days horizon Bayview Acquisition Corp is expected to generate 0.16 times more return on investment than Olin. However, Bayview Acquisition Corp is 6.32 times less risky than Olin. It trades about 0.03 of its potential returns per unit of risk. Olin Corporation is currently generating about -0.16 per unit of risk. If you would invest  1,091  in Bayview Acquisition Corp on December 28, 2024 and sell it today you would earn a total of  9.00  from holding Bayview Acquisition Corp or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bayview Acquisition Corp  vs.  Olin Corp.

Bayview Acquisition Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bayview Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bayview Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Olin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Olin Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bayview Acquisition and Olin

The main advantage of trading using opposite Bayview Acquisition and Olin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition position performs unexpectedly, Olin can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Olin will offset losses from the drop in Olin's long position.

The idea behind Bayview Acquisition Corp and Olin Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.