Correlation Between Growth For and Hawks Acquisition

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Can any of the company-specific risk be diversified away by investing in both Growth For and Hawks 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 Growth For and Hawks Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth For Good and Hawks Acquisition Corp, you can compare the effects of market volatilities on Growth For and Hawks 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 Growth For with a short position of Hawks Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth For and Hawks Acquisition.

Diversification Opportunities for Growth For and Hawks Acquisition

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Growth and Hawks is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Growth For Good and Hawks Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawks Acquisition Corp and Growth For 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 Growth For Good are associated (or correlated) with Hawks Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawks Acquisition Corp has no effect on the direction of Growth For i.e., Growth For and Hawks Acquisition go up and down completely randomly.

Pair Corralation between Growth For and Hawks Acquisition

Given the investment horizon of 90 days Growth For Good is expected to generate 0.54 times more return on investment than Hawks Acquisition. However, Growth For Good is 1.86 times less risky than Hawks Acquisition. It trades about 0.18 of its potential returns per unit of risk. Hawks Acquisition Corp is currently generating about 0.06 per unit of risk. If you would invest  1,009  in Growth For Good on September 6, 2024 and sell it today you would earn a total of  38.00  from holding Growth For Good or generate 3.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy93.85%
ValuesDaily Returns

Growth For Good  vs.  Hawks Acquisition Corp

 Performance 
       Timeline  
Growth For Good 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Growth For Good has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Growth For is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Hawks Acquisition Corp 

Risk-Adjusted Performance

0 of 100

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

Growth For and Hawks Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Growth For and Hawks Acquisition

The main advantage of trading using opposite Growth For and Hawks Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth For position performs unexpectedly, Hawks 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 Hawks Acquisition will offset losses from the drop in Hawks Acquisition's long position.
The idea behind Growth For Good and Hawks 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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