Correlation Between Bilander Acquisition and Continental Beverage

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Can any of the company-specific risk be diversified away by investing in both Bilander Acquisition and Continental Beverage 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 Bilander Acquisition and Continental Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilander Acquisition Corp and Continental Beverage Brands, you can compare the effects of market volatilities on Bilander Acquisition and Continental Beverage 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 Bilander Acquisition with a short position of Continental Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilander Acquisition and Continental Beverage.

Diversification Opportunities for Bilander Acquisition and Continental Beverage

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bilander and Continental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bilander Acquisition Corp and Continental Beverage Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Beverage and Bilander Acquisition 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 Bilander Acquisition Corp are associated (or correlated) with Continental Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Beverage has no effect on the direction of Bilander Acquisition i.e., Bilander Acquisition and Continental Beverage go up and down completely randomly.

Pair Corralation between Bilander Acquisition and Continental Beverage

If you would invest  70.00  in Continental Beverage Brands on October 7, 2024 and sell it today you would lose (30.00) from holding Continental Beverage Brands or give up 42.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy6.25%
ValuesDaily Returns

Bilander Acquisition Corp  vs.  Continental Beverage Brands

 Performance 
       Timeline  
Bilander Acquisition Corp 

Risk-Adjusted Performance

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Weak
 
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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 current stock price disturbance, may contribute to short-term losses for the investors.
Continental Beverage 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Continental Beverage Brands are ranked lower than 9 (%) 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 and Continental Beverage Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bilander Acquisition and Continental Beverage

The main advantage of trading using opposite Bilander Acquisition and Continental Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilander Acquisition position performs unexpectedly, Continental Beverage 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 Continental Beverage will offset losses from the drop in Continental Beverage's long position.
The idea behind Bilander Acquisition Corp and Continental Beverage Brands 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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