Correlation Between Bombardier and MINT Income

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

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

Diversification Opportunities for Bombardier and MINT Income

0.69

Correlation Coefficient

Bombardier  MINT Income

Poor diversification

The 3 months correlation between Bombardier and MINT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bombardier and MINT Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINT Income Fund and Bombardier 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 Bombardier are associated (or correlated) with MINT Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINT Income Fund has no effect on the direction of Bombardier i.e., Bombardier and MINT Income go up and down completely randomly.

Pair Corralation between Bombardier and MINT Income

Assuming the 90 days trading horizon Bombardier is expected to generate 2.49 times more return on investment than MINT Income. However, Bombardier is 2.49 times more volatile than MINT Income Fund. It trades about 0.1 of its potential returns per unit of risk. MINT Income Fund is currently generating about 0.12 per unit of risk. If you would invest  8,805  in Bombardier on September 5, 2024 and sell it today you would earn a total of  1,282  from holding Bombardier or generate 14.56% return on investment over 90 days.

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

Bombardier  vs.  MINT Income Fund

Bombardier

Risk-Adjusted Performance

7 of 100

OK

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

MINT Income Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MINT Income Fund are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, MINT Income may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bombardier and MINT Income

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

The idea behind Bombardier and MINT Income Fund 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.