Correlation Between Bowen Acquisition and Avis Budget

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

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

Diversification Opportunities for Bowen Acquisition and Avis Budget

0.27

Correlation Coefficient

Bowen Acquisition  Avis Budget

Modest diversification

The 3 months correlation between Bowen and Avis is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bowen Acquisition Corp and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group and Bowen 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 Bowen Acquisition Corp are associated (or correlated) with Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of Bowen Acquisition i.e., Bowen Acquisition and Avis Budget go up and down completely randomly.

Pair Corralation between Bowen Acquisition and Avis Budget

Assuming the 90 days horizon Bowen Acquisition Corp is expected to under-perform the Avis Budget. In addition to that, Bowen Acquisition is 2.64 times more volatile than Avis Budget Group. It trades about -0.08 of its total potential returns per unit of risk. Avis Budget Group is currently generating about -0.13 per unit of volatility. If you would invest  8,348  in Avis Budget Group on December 18, 2024 and sell it today you would lose (2,428) from holding Avis Budget Group or give up 29.08% of portfolio value over 90 days.

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

Bowen Acquisition Corp  vs.  Avis Budget Group

Bowen Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowen Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Avis Budget Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avis Budget Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bowen Acquisition and Avis Budget

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

The idea behind Bowen Acquisition Corp and Avis Budget Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.