Correlation Between Jupiter Wellness and Hawks Acquisition

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

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

Diversification Opportunities for Jupiter Wellness and Hawks Acquisition

-0.49

Correlation Coefficient

Jupiter Wellness  Hawks Acquisition

Very good diversification

The 3 months correlation between Jupiter and Hawks is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Wellness Acquisition and Hawks Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawks Acquisition Corp and Jupiter Wellness 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 Jupiter Wellness Acquisition are associated (or correlated) with Hawks Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawks Acquisition Corp has no effect on the direction of Jupiter Wellness i.e., Jupiter Wellness and Hawks Acquisition go up and down completely randomly.

Pair Corralation between Jupiter Wellness and Hawks Acquisition

Given the investment horizon of 90 days Jupiter Wellness Acquisition is expected to generate 36.83 times more return on investment than Hawks Acquisition. However, Jupiter Wellness is 36.83 times more volatile than Hawks Acquisition Corp. It trades about 0.01 of its potential returns per unit of risk. Hawks Acquisition Corp is currently generating about 0.07 per unit of risk. If you would invest  1,012  in Jupiter Wellness Acquisition on September 18, 2024 and sell it today you would lose (447.00) from holding Jupiter Wellness Acquisition or give up 44.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	81.34%
Values	Daily Returns

Jupiter Wellness Acquisition  vs.  Hawks Acquisition Corp

Jupiter Wellness Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Wellness Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jupiter Wellness is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Hawks Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawks Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Hawks 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 Jupiter Wellness and Hawks Acquisition

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

The idea behind Jupiter Wellness Acquisition and Hawks 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.