Correlation Between Bannix Acquisition and Global Star

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

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

Diversification Opportunities for Bannix Acquisition and Global Star

0.75

Correlation Coefficient

Bannix Acquisition  Global Star

Poor diversification

The 3 months correlation between Bannix and Global is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bannix Acquisition Corp and Global Star Acquisition, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Star Acquisition, and Bannix 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 Bannix Acquisition Corp are associated (or correlated) with Global Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Star Acquisition, has no effect on the direction of Bannix Acquisition i.e., Bannix Acquisition and Global Star go up and down completely randomly.

Pair Corralation between Bannix Acquisition and Global Star

Assuming the 90 days horizon Bannix Acquisition Corp is expected to generate 0.85 times more return on investment than Global Star. However, Bannix Acquisition Corp is 1.17 times less risky than Global Star. It trades about 0.14 of its potential returns per unit of risk. Global Star Acquisition, is currently generating about 0.11 per unit of risk. If you would invest  2.00  in Bannix Acquisition Corp on December 20, 2024 and sell it today you would earn a total of  1.00  from holding Bannix Acquisition Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.0%
Values	Daily Returns

Bannix Acquisition Corp  vs.  Global Star Acquisition,

Bannix Acquisition Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bannix Acquisition Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Bannix Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Global Star Acquisition,

Risk-Adjusted Performance

OK

Over the last 90 days Global Star Acquisition, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Global Star showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bannix Acquisition and Global Star

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

The idea behind Bannix Acquisition Corp and Global Star 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.