Correlation Between Stellus Capital and Bynordic Acquisition

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

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

Diversification Opportunities for Stellus Capital and Bynordic Acquisition

-0.51

Correlation Coefficient

Stellus Capital  Bynordic Acquisition

Excellent diversification

The 3 months correlation between Stellus and Bynordic is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment and Bynordic Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bynordic Acquisition Corp and Stellus 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 Stellus Capital Investment are associated (or correlated) with Bynordic Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bynordic Acquisition Corp has no effect on the direction of Stellus Capital i.e., Stellus Capital and Bynordic Acquisition go up and down completely randomly.

Pair Corralation between Stellus Capital and Bynordic Acquisition

Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 6.76 times more return on investment than Bynordic Acquisition. However, Stellus Capital is 6.76 times more volatile than Bynordic Acquisition Corp. It trades about 0.6 of its potential returns per unit of risk. Bynordic Acquisition Corp is currently generating about -0.08 per unit of risk. If you would invest  1,357  in Stellus Capital Investment on October 26, 2024 and sell it today you would earn a total of  126.00  from holding Stellus Capital Investment or generate 9.29% return on investment over 90 days.

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

Stellus Capital Investment  vs.  Bynordic Acquisition Corp

Stellus Capital Inve

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stellus Capital Investment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Stellus Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bynordic Acquisition Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bynordic Acquisition Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bynordic Acquisition is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Stellus Capital and Bynordic Acquisition

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

The idea behind Stellus Capital Investment and Bynordic 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.