Correlation Between BigBearai Holdings and GMV Minerals

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

By analyzing existing cross correlation between BigBearai Holdings and GMV Minerals, you can compare the effects of market volatilities on BigBearai Holdings and GMV Minerals 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 BigBearai Holdings with a short position of GMV Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and GMV Minerals.

Diversification Opportunities for BigBearai Holdings and GMV Minerals

-0.33

Correlation Coefficient

BigBearai Holdings  GMV Minerals

Very good diversification

The 3 months correlation between BigBearai and GMV is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and GMV Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMV Minerals and BigBearai 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 BigBearai Holdings are associated (or correlated) with GMV Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMV Minerals has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and GMV Minerals go up and down completely randomly.

Pair Corralation between BigBearai Holdings and GMV Minerals

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 0.78 times more return on investment than GMV Minerals. However, BigBearai Holdings is 1.29 times less risky than GMV Minerals. It trades about 0.13 of its potential returns per unit of risk. GMV Minerals is currently generating about 0.04 per unit of risk. If you would invest  158.00  in BigBearai Holdings on September 15, 2024 and sell it today you would earn a total of  94.00  from holding BigBearai Holdings or generate 59.49% return on investment over 90 days.

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

BigBearai Holdings  vs.  GMV Minerals

BigBearai Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

GMV Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GMV Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, GMV Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BigBearai Holdings and GMV Minerals

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

The idea behind BigBearai Holdings and GMV Minerals 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.