Correlation Between Investcorp Europe and Bannix Acquisition

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

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

Diversification Opportunities for Investcorp Europe and Bannix Acquisition

0.51

Correlation Coefficient

Investcorp Europe  Bannix Acquisition

Very weak diversification

The 3 months correlation between Investcorp and Bannix is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Europe Acquisition 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 Investcorp Europe 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 Investcorp Europe Acquisition 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 Investcorp Europe i.e., Investcorp Europe and Bannix Acquisition go up and down completely randomly.

Pair Corralation between Investcorp Europe and Bannix Acquisition

Given the investment horizon of 90 days Investcorp Europe Acquisition is expected to generate 1.08 times more return on investment than Bannix Acquisition. However, Investcorp Europe is 1.08 times more volatile than Bannix Acquisition Corp. It trades about 0.29 of its potential returns per unit of risk. Bannix Acquisition Corp is currently generating about -0.16 per unit of risk. If you would invest  1,155  in Investcorp Europe Acquisition on September 17, 2024 and sell it today you would earn a total of  9.00  from holding Investcorp Europe Acquisition or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Investcorp Europe Acquisition  vs.  Bannix Acquisition Corp

Investcorp Europe

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Europe Acquisition are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Investcorp Europe may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bannix Acquisition Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bannix Acquisition Corp are ranked lower than 2 (%) 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.

Pair Trading with Investcorp Europe and Bannix Acquisition

The main advantage of trading using opposite Investcorp Europe and Bannix Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investcorp Europe 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 Investcorp Europe Acquisition 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.

Check out your portfolio center.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.