Correlation Between Continental Beverage and Bilander Acquisition

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

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

Diversification Opportunities for Continental Beverage and Bilander Acquisition

-0.21

Correlation Coefficient

Continental Beverage  Bilander Acquisition

Very good diversification

The 3 months correlation between Continental and Bilander is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Continental Beverage Brands and Bilander Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilander Acquisition Corp and Continental Beverage 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 Continental Beverage Brands are associated (or correlated) with Bilander Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilander Acquisition Corp has no effect on the direction of Continental Beverage i.e., Continental Beverage and Bilander Acquisition go up and down completely randomly.

Pair Corralation between Continental Beverage and Bilander Acquisition

If you would invest  18.00  in Continental Beverage Brands on September 17, 2024 and sell it today you would earn a total of  47.00  from holding Continental Beverage Brands or generate 261.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Continental Beverage Brands  vs.  Bilander Acquisition Corp

Continental Beverage

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Beverage Brands are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Continental Beverage sustained solid returns over the last few months and may actually be approaching a breakup point.

Bilander Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilander Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Bilander Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Continental Beverage and Bilander Acquisition

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

The idea behind Continental Beverage Brands and Bilander Acquisition 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.