Correlation Between Inflection Point and Bridger Aerospace

Can any of the company-specific risk be diversified away by investing in both Inflection Point and Bridger Aerospace 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 Inflection Point and Bridger Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inflection Point Acquisition and Bridger Aerospace Group, you can compare the effects of market volatilities on Inflection Point and Bridger Aerospace 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 Inflection Point with a short position of Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Bridger Aerospace.

Diversification Opportunities for Inflection Point and Bridger Aerospace

0.25

Correlation Coefficient

Inflection Point  Bridger Aerospace

Modest diversification

The 3 months correlation between Inflection and Bridger is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Inflection Point i.e., Inflection Point and Bridger Aerospace go up and down completely randomly.

Pair Corralation between Inflection Point and Bridger Aerospace

Assuming the 90 days horizon Inflection Point Acquisition is expected to under-perform the Bridger Aerospace. But the stock apears to be less risky and, when comparing its historical volatility, Inflection Point Acquisition is 4.07 times less risky than Bridger Aerospace. The stock trades about -0.07 of its potential returns per unit of risk. The Bridger Aerospace Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.10  in Bridger Aerospace Group on December 23, 2024 and sell it today you would earn a total of  1.23  from holding Bridger Aerospace Group or generate 24.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.16%
Values	Daily Returns

Inflection Point Acquisition  vs.  Bridger Aerospace Group

Inflection Point Acq

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inflection Point Acquisition 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bridger Aerospace

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inflection Point and Bridger Aerospace

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

The idea behind Inflection Point Acquisition and Bridger Aerospace Group 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 Stocks Directory module to find actively traded stocks across global markets.