Correlation Between Broad Capital and Manhattan Bridge

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

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

Diversification Opportunities for Broad Capital and Manhattan Bridge

-0.67

Correlation Coefficient

Broad Capital  Manhattan Bridge

Excellent diversification

The 3 months correlation between Broad and Manhattan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and Manhattan Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Bridge Capital and Broad Capital 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 Broad Capital Acquisition are associated (or correlated) with Manhattan Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Bridge Capital has no effect on the direction of Broad Capital i.e., Broad Capital and Manhattan Bridge go up and down completely randomly.

Pair Corralation between Broad Capital and Manhattan Bridge

Assuming the 90 days horizon Broad Capital Acquisition is expected to under-perform the Manhattan Bridge. But the stock apears to be less risky and, when comparing its historical volatility, Broad Capital Acquisition is 1.71 times less risky than Manhattan Bridge. The stock trades about -0.13 of its potential returns per unit of risk. The Manhattan Bridge Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  510.00  in Manhattan Bridge Capital on September 4, 2024 and sell it today you would earn a total of  26.00  from holding Manhattan Bridge Capital or generate 5.1% return on investment over 90 days.

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

Broad Capital Acquisition  vs.  Manhattan Bridge Capital

Broad Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broad Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Manhattan Bridge Capital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Bridge Capital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Manhattan Bridge is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Broad Capital and Manhattan Bridge

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

The idea behind Broad Capital Acquisition and Manhattan Bridge Capital 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.