Correlation Between Global Blockchain and Bannix Acquisition

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

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

Diversification Opportunities for Global Blockchain and Bannix Acquisition

0.12

Correlation Coefficient

Global Blockchain  Bannix Acquisition

Average diversification

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

Pair Corralation between Global Blockchain and Bannix Acquisition

Given the investment horizon of 90 days Global Blockchain is expected to generate 1.28 times less return on investment than Bannix Acquisition. But when comparing it to its historical volatility, Global Blockchain Acquisition is 1.61 times less risky than Bannix Acquisition. It trades about 0.1 of its potential returns per unit of risk. Bannix Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,120  in Bannix Acquisition Corp on December 28, 2024 and sell it today you would earn a total of  50.00  from holding Bannix Acquisition Corp or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Global Blockchain Acquisition  vs.  Bannix Acquisition Corp

Global Blockchain

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blockchain Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Global Blockchain is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bannix Acquisition Corp

Risk-Adjusted Performance

Modest

Over the last 90 days Bannix Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Bannix Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Blockchain and Bannix Acquisition

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

The idea behind Global Blockchain Acquisition and Bannix Acquisition Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.