Correlation Between Beneficient and Inflection Point

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

By analyzing existing cross correlation between Beneficient Class A and Inflection Point Acquisition, you can compare the effects of market volatilities on Beneficient and Inflection Point 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 Beneficient with a short position of Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beneficient and Inflection Point.

Diversification Opportunities for Beneficient and Inflection Point

-0.35

Correlation Coefficient

Beneficient  Inflection Point

Very good diversification

The 3 months correlation between Beneficient and Inflection is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Beneficient Class A and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and Beneficient 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 Beneficient Class A are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Beneficient i.e., Beneficient and Inflection Point go up and down completely randomly.

Pair Corralation between Beneficient and Inflection Point

Given the investment horizon of 90 days Beneficient Class A is expected to under-perform the Inflection Point. In addition to that, Beneficient is 3.1 times more volatile than Inflection Point Acquisition. It trades about -0.04 of its total potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.18 per unit of volatility. If you would invest  1,075  in Inflection Point Acquisition on September 12, 2024 and sell it today you would earn a total of  415.00  from holding Inflection Point Acquisition or generate 38.6% return on investment over 90 days.

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

Beneficient Class A  vs.  Inflection Point Acquisition

Beneficient Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beneficient Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Inflection Point Acq

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Beneficient and Inflection Point

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

The idea behind Beneficient Class A and Inflection Point Acquisition 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.