Correlation Between Bowhead Specialty and AA Mission

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

By analyzing existing cross correlation between Bowhead Specialty Holdings and AA Mission Acquisition, you can compare the effects of market volatilities on Bowhead Specialty and AA Mission 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 Bowhead Specialty with a short position of AA Mission. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and AA Mission.

Diversification Opportunities for Bowhead Specialty and AA Mission

-0.88

Correlation Coefficient

Bowhead Specialty  AA Mission

Pay attention - limited upside

The 3 months correlation between Bowhead and AAM is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and AA Mission Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AA Mission Acquisition and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with AA Mission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AA Mission Acquisition has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and AA Mission go up and down completely randomly.

Pair Corralation between Bowhead Specialty and AA Mission

Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to under-perform the AA Mission. In addition to that, Bowhead Specialty is 12.33 times more volatile than AA Mission Acquisition. It trades about -0.22 of its total potential returns per unit of risk. AA Mission Acquisition is currently generating about 0.16 per unit of volatility. If you would invest  1,031  in AA Mission Acquisition on May 5, 2025 and sell it today you would earn a total of  15.00  from holding AA Mission Acquisition or generate 1.45% return on investment over 90 days.

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

Bowhead Specialty Holdings  vs.  AA Mission Acquisition

Bowhead Specialty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bowhead Specialty Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AA Mission Acquisition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AA Mission Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AA Mission is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bowhead Specialty and AA Mission

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

The idea behind Bowhead Specialty Holdings and AA Mission 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.