Correlation Between Genesis Unicorn and Banner Acquisition

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

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

Diversification Opportunities for Genesis Unicorn and Banner Acquisition

0.0

Correlation Coefficient

Genesis Unicorn  Banner Acquisition

Pay attention - limited upside

The 3 months correlation between Genesis and Banner is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Unicorn Capital and Banner Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banner Acquisition Corp and Genesis Unicorn 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 Genesis Unicorn Capital are associated (or correlated) with Banner Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banner Acquisition Corp has no effect on the direction of Genesis Unicorn i.e., Genesis Unicorn and Banner Acquisition go up and down completely randomly.

Pair Corralation between Genesis Unicorn and Banner Acquisition

If you would invest (100.00) in Banner Acquisition Corp on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Banner Acquisition Corp or generate -100.0% return on investment over 90 days.

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

Genesis Unicorn Capital  vs.  Banner Acquisition Corp

Genesis Unicorn Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genesis Unicorn Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Genesis Unicorn is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Banner Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banner Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Banner Acquisition is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genesis Unicorn and Banner Acquisition

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

The idea behind Genesis Unicorn Capital and Banner 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.