Correlation Between Bowen Acquisition and Suntory Beverage

Can any of the company-specific risk be diversified away by investing in both Bowen Acquisition and Suntory Beverage 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 Suntory Beverage 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 Suntory Beverage Food, you can compare the effects of market volatilities on Bowen Acquisition and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowen Acquisition and Suntory Beverage.

Diversification Opportunities for Bowen Acquisition and Suntory Beverage

-0.17

Correlation Coefficient

Bowen Acquisition  Suntory Beverage

Good diversification

The 3 months correlation between Bowen and Suntory is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bowen Acquisition Corp and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Bowen Acquisition i.e., Bowen Acquisition and Suntory Beverage go up and down completely randomly.

Pair Corralation between Bowen Acquisition and Suntory Beverage

Assuming the 90 days horizon Bowen Acquisition Corp is expected to generate 10.17 times more return on investment than Suntory Beverage. However, Bowen Acquisition is 10.17 times more volatile than Suntory Beverage Food. It trades about 0.01 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about 0.04 per unit of risk. If you would invest  1,110  in Bowen Acquisition Corp on December 20, 2024 and sell it today you would lose (370.00) from holding Bowen Acquisition Corp or give up 33.33% of portfolio value over 90 days.

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

Bowen Acquisition Corp  vs.  Suntory Beverage Food

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 comparatively unfluctuating basic indicators, Bowen Acquisition may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Suntory Beverage Food

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suntory Beverage Food are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Suntory Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bowen Acquisition and Suntory Beverage

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

The idea behind Bowen Acquisition Corp and Suntory Beverage Food 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.