Correlation Between Blueriver Acquisition and Battery Future

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

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

Diversification Opportunities for Blueriver Acquisition and Battery Future

-0.67

Correlation Coefficient

Blueriver Acquisition  Battery Future

Excellent diversification

The 3 months correlation between Blueriver and Battery is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Blueriver Acquisition Corp and Battery Future Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battery Future Acqui and Blueriver 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 Blueriver Acquisition Corp are associated (or correlated) with Battery Future. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battery Future Acqui has no effect on the direction of Blueriver Acquisition i.e., Blueriver Acquisition and Battery Future go up and down completely randomly.

Pair Corralation between Blueriver Acquisition and Battery Future

Given the investment horizon of 90 days Blueriver Acquisition Corp is expected to under-perform the Battery Future. But the stock apears to be less risky and, when comparing its historical volatility, Blueriver Acquisition Corp is 1.24 times less risky than Battery Future. The stock trades about -0.41 of its potential returns per unit of risk. The Battery Future Acquisition is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,103  in Battery Future Acquisition on September 18, 2024 and sell it today you would earn a total of  25.00  from holding Battery Future Acquisition or generate 2.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	9.52%
Values	Daily Returns

Blueriver Acquisition Corp  vs.  Battery Future Acquisition

Blueriver Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Battery Future Acqui

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Battery Future Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Battery Future is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blueriver Acquisition and Battery Future

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

The idea behind Blueriver Acquisition Corp and Battery Future Acquisition 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.