Correlation Between Bridger Aerospace and BOS Better

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

By analyzing existing cross correlation between Bridger Aerospace Group and BOS Better Online, you can compare the effects of market volatilities on Bridger Aerospace and BOS Better 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 Bridger Aerospace with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and BOS Better.

Diversification Opportunities for Bridger Aerospace and BOS Better

-0.12

Correlation Coefficient

Bridger Aerospace  BOS Better

Good diversification

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

Pair Corralation between Bridger Aerospace and BOS Better

Assuming the 90 days horizon Bridger Aerospace Group is expected to under-perform the BOS Better. In addition to that, Bridger Aerospace is 5.66 times more volatile than BOS Better Online. It trades about -0.39 of its total potential returns per unit of risk. BOS Better Online is currently generating about -0.09 per unit of volatility. If you would invest  282.00  in BOS Better Online on February 11, 2024 and sell it today you would lose (5.00) from holding BOS Better Online or give up 1.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.09%
Values	Daily Returns

Bridger Aerospace Group  vs.  BOS Better Online

Bridger Aerospace

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bridger Aerospace Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

BOS Better Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BOS Better Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BOS Better is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bridger Aerospace and BOS Better

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

The idea behind Bridger Aerospace Group and BOS Better Online 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.