Correlation Between HCM Acquisition and Denali Capital

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

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

Diversification Opportunities for HCM Acquisition and Denali Capital

-0.09

Correlation Coefficient

HCM Acquisition  Denali Capital

Good diversification

The 3 months correlation between HCM and Denali is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding HCM Acquisition Corp and Denali Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denali Capital Acqui and HCM 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 HCM Acquisition Corp are associated (or correlated) with Denali Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denali Capital Acqui has no effect on the direction of HCM Acquisition i.e., HCM Acquisition and Denali Capital go up and down completely randomly.

Pair Corralation between HCM Acquisition and Denali Capital

If you would invest  2.06  in HCM Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  0.00  from holding HCM Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	7.69%
Values	Daily Returns

HCM Acquisition Corp  vs.  Denali Capital Acquisition

HCM Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Denali Capital Acqui

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Denali Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with HCM Acquisition and Denali Capital

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

The idea behind HCM Acquisition Corp and Denali Capital 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.