Correlation Between HHG Capital and Bannix Acquisition

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

Diversification Opportunities for HHG Capital and Bannix Acquisition

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between HHG and Bannix is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HHG Capital Corp and Bannix Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bannix Acquisition Corp and HHG 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 HHG Capital Corp are associated (or correlated) with Bannix Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bannix Acquisition Corp has no effect on the direction of HHG Capital i.e., HHG Capital and Bannix Acquisition go up and down completely randomly.

Pair Corralation between HHG Capital and Bannix Acquisition

Given the investment horizon of 90 days HHG Capital Corp is expected to under-perform the Bannix Acquisition. In addition to that, HHG Capital is 6.38 times more volatile than Bannix Acquisition Corp. It trades about -0.18 of its total potential returns per unit of risk. Bannix Acquisition Corp is currently generating about 0.04 per unit of volatility. If you would invest  1,115  in Bannix Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  5.00  from holding Bannix Acquisition Corp or generate 0.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy23.81%
ValuesDaily Returns

HHG Capital Corp  vs.  Bannix Acquisition Corp

 Performance 
       Timeline  
HHG Capital Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HHG Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Bannix Acquisition Corp 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bannix Acquisition Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Bannix Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

HHG Capital and Bannix Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HHG Capital and Bannix Acquisition

The main advantage of trading using opposite HHG Capital and Bannix Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HHG Capital position performs unexpectedly, Bannix 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 Bannix Acquisition will offset losses from the drop in Bannix Acquisition's long position.
The idea behind HHG Capital Corp and Bannix 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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