Correlation Between BBAI WT and Tritium DCFC

Can any of the company-specific risk be diversified away by investing in both BBAI WT and Tritium DCFC 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 BBAI WT and Tritium DCFC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BBAI WT and Tritium DCFC Limited, you can compare the effects of market volatilities on BBAI WT and Tritium DCFC 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 BBAI WT with a short position of Tritium DCFC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBAI WT and Tritium DCFC.

Diversification Opportunities for BBAI WT and Tritium DCFC

-0.49

Correlation Coefficient

BBAI WT  Tritium DCFC

Very good diversification

The 3 months correlation between BBAI and Tritium is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BBAI WT and Tritium DCFC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritium DCFC Limited and BBAI WT 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 BBAI WT are associated (or correlated) with Tritium DCFC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritium DCFC Limited has no effect on the direction of BBAI WT i.e., BBAI WT and Tritium DCFC go up and down completely randomly.

Pair Corralation between BBAI WT and Tritium DCFC

If you would invest  14.00  in BBAI WT on September 30, 2024 and sell it today you would earn a total of  131.00  from holding BBAI WT or generate 935.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

BBAI WT  vs.  Tritium DCFC Limited

BBAI WT

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BBAI WT are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, BBAI WT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tritium DCFC Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritium DCFC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Tritium DCFC is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BBAI WT and Tritium DCFC

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

The idea behind BBAI WT and Tritium DCFC Limited 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.