Correlation Between HCM Acquisition and Growth For

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

Diversification Opportunities for HCM Acquisition and Growth For

0.11

Correlation Coefficient

HCM Acquisition  Growth For

Average diversification

The 3 months correlation between HCM and Growth is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding HCM Acquisition Corp and Growth For Good in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth For Good 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 Growth For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth For Good has no effect on the direction of HCM Acquisition i.e., HCM Acquisition and Growth For go up and down completely randomly.

Pair Corralation between HCM Acquisition and Growth For

Assuming the 90 days horizon HCM Acquisition Corp is expected to generate 395.77 times more return on investment than Growth For. However, HCM Acquisition is 395.77 times more volatile than Growth For Good. It trades about 0.2 of its potential returns per unit of risk. Growth For Good is currently generating about 0.2 per unit of risk. If you would invest  0.97  in HCM Acquisition Corp on September 21, 2024 and sell it today you would earn a total of  1.09  from holding HCM Acquisition Corp or generate 112.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	52.52%
Values	Daily Returns

HCM Acquisition Corp  vs.  Growth For Good

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.

Growth For Good

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with HCM Acquisition and Growth For

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

The idea behind HCM Acquisition Corp and Growth For Good 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.