Correlation Between Hennessy Capital and Integral Acquisition

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

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

Diversification Opportunities for Hennessy Capital and Integral Acquisition

-0.16

Correlation Coefficient

Hennessy Capital  Integral Acquisition

Good diversification

The 3 months correlation between Hennessy and Integral is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Capital Investment and Integral Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Acquisition and Hennessy Capital 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 Hennessy Capital Investment are associated (or correlated) with Integral Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Acquisition has no effect on the direction of Hennessy Capital i.e., Hennessy Capital and Integral Acquisition go up and down completely randomly.

Pair Corralation between Hennessy Capital and Integral Acquisition

If you would invest  0.04  in Integral Acquisition on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Integral Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	9.09%
Values	Daily Returns

Hennessy Capital Investment  vs.  Integral Acquisition

Hennessy Capital Inv

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Capital Investment are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Hennessy Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Integral Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral 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 technical and fundamental 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 Hennessy Capital and Integral Acquisition

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

The idea behind Hennessy Capital Investment and Integral 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.