Correlation Between HYBE and NH SPAC

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

By analyzing existing cross correlation between HYBE Co and NH SPAC 8, you can compare the effects of market volatilities on HYBE and NH SPAC 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 HYBE with a short position of NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYBE and NH SPAC.

Diversification Opportunities for HYBE and NH SPAC

0.16

Correlation Coefficient

HYBE  NH SPAC

Average diversification

The 3 months correlation between HYBE and 225570 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding HYBE Co and NH SPAC 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 8 and HYBE 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 HYBE Co are associated (or correlated) with NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 8 has no effect on the direction of HYBE i.e., HYBE and NH SPAC go up and down completely randomly.

Pair Corralation between HYBE and NH SPAC

Assuming the 90 days trading horizon HYBE Co is expected to generate 0.95 times more return on investment than NH SPAC. However, HYBE Co is 1.06 times less risky than NH SPAC. It trades about 0.14 of its potential returns per unit of risk. NH SPAC 8 is currently generating about -0.04 per unit of risk. If you would invest  19,972,800  in HYBE Co on December 22, 2024 and sell it today you would earn a total of  3,227,200  from holding HYBE Co or generate 16.16% return on investment over 90 days.

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

HYBE Co  vs.  NH SPAC 8

HYBE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HYBE Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HYBE sustained solid returns over the last few months and may actually be approaching a breakup point.

NH SPAC 8

Risk-Adjusted Performance

Very Weak

Over the last 90 days NH SPAC 8 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NH SPAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HYBE and NH SPAC

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

The idea behind HYBE Co and NH SPAC 8 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.