Correlation Between BigBearai Holdings and 126650DN7

Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and 126650DN7 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 126650DN7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BigBearai Holdings and CVS HEALTH P, you can compare the effects of market volatilities on BigBearai Holdings and 126650DN7 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 126650DN7. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and 126650DN7.

Diversification Opportunities for BigBearai Holdings and 126650DN7

-0.24

Correlation Coefficient

BigBearai Holdings  126650DN7

Very good diversification

The 3 months correlation between BigBearai and 126650DN7 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and CVS HEALTH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH P 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 126650DN7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH P has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and 126650DN7 go up and down completely randomly.

Pair Corralation between BigBearai Holdings and 126650DN7

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 14.55 times more return on investment than 126650DN7. However, BigBearai Holdings is 14.55 times more volatile than CVS HEALTH P. It trades about 0.17 of its potential returns per unit of risk. CVS HEALTH P is currently generating about -0.16 per unit of risk. If you would invest  158.00  in BigBearai Holdings on September 14, 2024 and sell it today you would earn a total of  140.00  from holding BigBearai Holdings or generate 88.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

BigBearai Holdings  vs.  CVS HEALTH P

BigBearai Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 13 (%) 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.

CVS HEALTH P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVS HEALTH P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 126650DN7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BigBearai Holdings and 126650DN7

The main advantage of trading using opposite BigBearai Holdings and 126650DN7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, 126650DN7 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 126650DN7 will offset losses from the drop in 126650DN7's long position.

The idea behind BigBearai Holdings and CVS HEALTH P 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.