Correlation Between Bill and Bridgetown Holdings

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

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

Diversification Opportunities for Bill and Bridgetown Holdings

0.37

Correlation Coefficient

Bill  Bridgetown Holdings

Weak diversification

The 3 months correlation between Bill and Bridgetown is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings and Bill 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 Bill Com Holdings are associated (or correlated) with Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Bill i.e., Bill and Bridgetown Holdings go up and down completely randomly.

Pair Corralation between Bill and Bridgetown Holdings

Given the investment horizon of 90 days Bill is expected to generate 18.5 times less return on investment than Bridgetown Holdings. But when comparing it to its historical volatility, Bill Com Holdings is 3.63 times less risky than Bridgetown Holdings. It trades about 0.01 of its potential returns per unit of risk. Bridgetown Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Bridgetown Holdings on October 3, 2024 and sell it today you would lose (4.00) from holding Bridgetown Holdings or give up 16.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	26.67%
Values	Daily Returns

Bill Com Holdings  vs.  Bridgetown Holdings

Bill Com Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bridgetown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bridgetown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bridgetown Holdings 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 Bill and Bridgetown Holdings

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

The idea behind Bill Com Holdings and Bridgetown Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.