Correlation Between Bridgetown Holdings and Nuvve Holding

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

By analyzing existing cross correlation between Bridgetown Holdings and Nuvve Holding Corp, you can compare the effects of market volatilities on Bridgetown Holdings and Nuvve Holding 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 Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgetown Holdings and Nuvve Holding.

Diversification Opportunities for Bridgetown Holdings and Nuvve Holding

-0.18

Correlation Coefficient

Bridgetown Holdings  Nuvve Holding

Good diversification

The 3 months correlation between Bridgetown and Nuvve is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bridgetown Holdings and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp 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 Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Bridgetown Holdings i.e., Bridgetown Holdings and Nuvve Holding go up and down completely randomly.

Pair Corralation between Bridgetown Holdings and Nuvve Holding

If you would invest  2.56  in Nuvve Holding Corp on September 27, 2024 and sell it today you would lose (0.86) from holding Nuvve Holding Corp or give up 33.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.63%
Values	Daily Returns

Bridgetown Holdings  vs.  Nuvve Holding Corp

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

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Bridgetown Holdings and Nuvve Holding

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

The idea behind Bridgetown Holdings and Nuvve Holding 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.