Correlation Between Bridgetown Holdings and Eos Energy

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

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

Diversification Opportunities for Bridgetown Holdings and Eos Energy

0.04

Correlation Coefficient

Bridgetown Holdings  Eos Energy

Significant diversification

The 3 months correlation between Bridgetown and Eos is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bridgetown Holdings and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises and Bridgetown Holdings 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 Bridgetown Holdings are associated (or correlated) with Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of Bridgetown Holdings i.e., Bridgetown Holdings and Eos Energy go up and down completely randomly.

Pair Corralation between Bridgetown Holdings and Eos Energy

If you would invest  64.00  in Eos Energy Enterprises on October 24, 2024 and sell it today you would earn a total of  56.00  from holding Eos Energy Enterprises or generate 87.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Bridgetown Holdings  vs.  Eos Energy Enterprises

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 newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Eos Energy Enterprises

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eos Energy Enterprises are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Eos Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bridgetown Holdings and Eos Energy

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

The idea behind Bridgetown Holdings and Eos Energy Enterprises 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.