Correlation Between CO2 Energy and Bayview Acquisition

Can any of the company-specific risk be diversified away by investing in both CO2 Energy and Bayview Acquisition 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 CO2 Energy and Bayview Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CO2 Energy Transition and Bayview Acquisition Corp, you can compare the effects of market volatilities on CO2 Energy and Bayview Acquisition 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 CO2 Energy with a short position of Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of CO2 Energy and Bayview Acquisition.

Diversification Opportunities for CO2 Energy and Bayview Acquisition

0.12

Correlation Coefficient

CO2 Energy  Bayview Acquisition

Average diversification

The 3 months correlation between CO2 and Bayview is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CO2 Energy Transition and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp and CO2 Energy 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 CO2 Energy Transition are associated (or correlated) with Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of CO2 Energy i.e., CO2 Energy and Bayview Acquisition go up and down completely randomly.

Pair Corralation between CO2 Energy and Bayview Acquisition

Assuming the 90 days horizon CO2 Energy Transition is not expected to generate positive returns. However, CO2 Energy Transition is 111.0 times less risky than Bayview Acquisition. It waists most of its returns potential to compensate for thr risk taken. Bayview Acquisition is generating about 0.21 per unit of risk. If you would invest  15.00  in Bayview Acquisition Corp on August 31, 2024 and sell it today you would earn a total of  2.00  from holding Bayview Acquisition Corp or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

CO2 Energy Transition  vs.  Bayview Acquisition Corp

CO2 Energy Transition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CO2 Energy Transition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, CO2 Energy is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Bayview Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bayview Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with CO2 Energy and Bayview Acquisition

The main advantage of trading using opposite CO2 Energy and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CO2 Energy position performs unexpectedly, Bayview Acquisition 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.

The idea behind CO2 Energy Transition and Bayview Acquisition Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.