Correlation Between HHG Capital and Inception Growth

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

Diversification Opportunities for HHG Capital and Inception Growth

-0.31

Correlation Coefficient

HHG Capital  Inception Growth

Very good diversification

The 3 months correlation between HHG and Inception is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding HHG Capital Corp and Inception Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inception Growth Acq 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 Inception Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inception Growth Acq has no effect on the direction of HHG Capital i.e., HHG Capital and Inception Growth go up and down completely randomly.

Pair Corralation between HHG Capital and Inception Growth

Assuming the 90 days horizon HHG Capital is expected to generate 1234.76 times less return on investment than Inception Growth. But when comparing it to its historical volatility, HHG Capital Corp is 105.54 times less risky than Inception Growth. It trades about 0.01 of its potential returns per unit of risk. Inception Growth Acquisition is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Inception Growth Acquisition on October 6, 2024 and sell it today you would lose (14.00) from holding Inception Growth Acquisition or give up 73.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.83%
Values	Daily Returns

HHG Capital Corp  vs.  Inception Growth Acquisition

HHG Capital Corp

Risk-Adjusted Performance

0 of 100

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 comparatively stable fundamental indicators, HHG Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Inception Growth Acq

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Inception Growth Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Inception Growth reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HHG Capital and Inception Growth

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

The idea behind HHG Capital Corp and Inception Growth 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.