Correlation Between BigBearai Holdings and Lasertec

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

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

Diversification Opportunities for BigBearai Holdings and Lasertec

0.33

Correlation Coefficient

BigBearai Holdings  Lasertec

Weak diversification

The 3 months correlation between BigBearai and Lasertec is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Lasertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lasertec and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Lasertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lasertec has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Lasertec go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Lasertec

Given the investment horizon of 90 days BigBearai Holdings is expected to under-perform the Lasertec. In addition to that, BigBearai Holdings is 3.82 times more volatile than Lasertec. It trades about -0.02 of its total potential returns per unit of risk. Lasertec is currently generating about -0.04 per unit of volatility. If you would invest  1,921  in Lasertec on December 29, 2024 and sell it today you would lose (178.00) from holding Lasertec or give up 9.27% of portfolio value over 90 days.

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

BigBearai Holdings  vs.  Lasertec

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Lasertec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lasertec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BigBearai Holdings and Lasertec

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

The idea behind BigBearai Holdings and Lasertec 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.