Correlation Between Healthwell Acquisition and Bannix Acquisition

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

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

Diversification Opportunities for Healthwell Acquisition and Bannix Acquisition

0.24

Correlation Coefficient

Healthwell Acquisition  Bannix Acquisition

Modest diversification

The 3 months correlation between Healthwell and Bannix is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Healthwell Acquisition 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 Healthwell 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 Healthwell Acquisition 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 Healthwell Acquisition i.e., Healthwell Acquisition and Bannix Acquisition go up and down completely randomly.

Pair Corralation between Healthwell Acquisition and Bannix Acquisition

If you would invest  1.49  in Bannix Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  0.51  from holding Bannix Acquisition Corp or generate 34.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.0%
Values	Daily Returns

Healthwell Acquisition Corp  vs.  Bannix Acquisition Corp

Healthwell Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bannix Acquisition Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Bannix Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Bannix Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Healthwell Acquisition and Bannix Acquisition

The main advantage of trading using opposite Healthwell Acquisition and Bannix Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthwell Acquisition 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 Healthwell Acquisition 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.