Correlation Between BaringtonHilco Acquisition and Sustainable Development

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

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

Diversification Opportunities for BaringtonHilco Acquisition and Sustainable Development

0.0

Correlation Coefficient

BaringtonHilco Acquisition  Sustainable Development

Pay attention - limited upside

The 3 months correlation between BaringtonHilco and Sustainable is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BaringtonHilco Acquisition and Sustainable Development Acquis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sustainable Development and BaringtonHilco 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 BaringtonHilco Acquisition are associated (or correlated) with Sustainable Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sustainable Development has no effect on the direction of BaringtonHilco Acquisition i.e., BaringtonHilco Acquisition and Sustainable Development go up and down completely randomly.

Pair Corralation between BaringtonHilco Acquisition and Sustainable Development

Given the investment horizon of 90 days BaringtonHilco Acquisition is expected to generate 4.03 times less return on investment than Sustainable Development. In addition to that, BaringtonHilco Acquisition is 3.06 times more volatile than Sustainable Development Acquisition. It trades about 0.01 of its total potential returns per unit of risk. Sustainable Development Acquisition is currently generating about 0.1 per unit of volatility. If you would invest  1,007  in Sustainable Development Acquisition on October 26, 2024 and sell it today you would earn a total of  33.00  from holding Sustainable Development Acquisition or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	27.04%
Values	Daily Returns

BaringtonHilco Acquisition  vs.  Sustainable Development Acquis

BaringtonHilco Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BaringtonHilco Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BaringtonHilco Acquisition is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sustainable Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sustainable Development Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sustainable Development is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BaringtonHilco Acquisition and Sustainable Development

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

The idea behind BaringtonHilco Acquisition and Sustainable Development 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.