Correlation Between Bleuacacia and Bannix Acquisition

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

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

Diversification Opportunities for Bleuacacia and Bannix Acquisition

-0.38

Correlation Coefficient

Bleuacacia  Bannix Acquisition

Very good diversification

The 3 months correlation between Bleuacacia and Bannix is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bleuacacia Ltd Warrants and Bannix Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bannix Acquisition Corp and Bleuacacia 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 Bleuacacia Ltd Warrants are associated (or correlated) with Bannix Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bannix Acquisition Corp has no effect on the direction of Bleuacacia i.e., Bleuacacia and Bannix Acquisition go up and down completely randomly.

Pair Corralation between Bleuacacia and Bannix Acquisition

Assuming the 90 days horizon Bleuacacia Ltd Warrants is expected to generate 1.45 times more return on investment than Bannix Acquisition. However, Bleuacacia is 1.45 times more volatile than Bannix Acquisition Corp. It trades about 0.16 of its potential returns per unit of risk. Bannix Acquisition Corp is currently generating about 0.11 per unit of risk. If you would invest  4.90  in Bleuacacia Ltd Warrants on October 25, 2024 and sell it today you would lose (3.93) from holding Bleuacacia Ltd Warrants or give up 80.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.27%
Values	Daily Returns

Bleuacacia Ltd Warrants  vs.  Bannix Acquisition Corp

Bleuacacia Warrants

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Bleuacacia Ltd Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Bleuacacia showed solid returns over the last few months and may actually be approaching a breakup point.

Bannix Acquisition Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bannix Acquisition Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Bannix Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bleuacacia and Bannix Acquisition

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

The idea behind Bleuacacia Ltd Warrants and Bannix Acquisition Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.