Correlation Between Bayview Acquisition and Short Duration

Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and Short Duration 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 Short Duration 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 Short Duration Income, you can compare the effects of market volatilities on Bayview Acquisition and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Short Duration.

Diversification Opportunities for Bayview Acquisition and Short Duration

0.01

Correlation Coefficient

Bayview Acquisition  Short Duration

Significant diversification

The 3 months correlation between Bayview and Short is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Short Duration Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Income 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Income has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Short Duration go up and down completely randomly.

Pair Corralation between Bayview Acquisition and Short Duration

Assuming the 90 days horizon Bayview Acquisition Corp is expected to generate 5.95 times more return on investment than Short Duration. However, Bayview Acquisition is 5.95 times more volatile than Short Duration Income. It trades about 0.17 of its potential returns per unit of risk. Short Duration Income is currently generating about 0.05 per unit of risk. If you would invest  1,043  in Bayview Acquisition Corp on September 12, 2024 and sell it today you would earn a total of  67.00  from holding Bayview Acquisition Corp or generate 6.42% return on investment over 90 days.

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

Bayview Acquisition Corp  vs.  Short Duration Income

Bayview Acquisition Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bayview Acquisition Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bayview Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Short Duration Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Short Duration Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Short Duration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bayview Acquisition and Short Duration

The main advantage of trading using opposite Bayview Acquisition and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration's long position.

The idea behind Bayview Acquisition Corp and Short Duration Income 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.