Correlation Between Bannix Acquisition and Pinterest

Can any of the company-specific risk be diversified away by investing in both Bannix Acquisition and Pinterest 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 Pinterest 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 Pinterest, you can compare the effects of market volatilities on Bannix Acquisition and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bannix Acquisition and Pinterest.

Diversification Opportunities for Bannix Acquisition and Pinterest

-0.17

Correlation Coefficient

Bannix Acquisition  Pinterest

Good diversification

The 3 months correlation between Bannix and Pinterest is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bannix Acquisition Corp and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Bannix Acquisition i.e., Bannix Acquisition and Pinterest go up and down completely randomly.

Pair Corralation between Bannix Acquisition and Pinterest

Assuming the 90 days horizon Bannix Acquisition Corp is expected to generate 4.58 times more return on investment than Pinterest. However, Bannix Acquisition is 4.58 times more volatile than Pinterest. It trades about 0.1 of its potential returns per unit of risk. Pinterest is currently generating about 0.06 per unit of risk. If you would invest  2.51  in Bannix Acquisition Corp on December 21, 2024 and sell it today you would earn a total of  0.49  from holding Bannix Acquisition Corp or generate 19.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	61.67%
Values	Daily Returns

Bannix Acquisition Corp  vs.  Pinterest

Bannix Acquisition Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bannix Acquisition Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Bannix Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pinterest

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Pinterest unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bannix Acquisition and Pinterest

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

The idea behind Bannix Acquisition Corp and Pinterest 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.