Correlation Between Pono Capital and HCM Acquisition

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Pono Capital and HCM 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 Pono Capital and HCM Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pono Capital Two and HCM Acquisition Corp, you can compare the effects of market volatilities on Pono Capital and HCM 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 Pono Capital with a short position of HCM Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pono Capital and HCM Acquisition.

Diversification Opportunities for Pono Capital and HCM Acquisition

PonoHCMDiversified AwayPonoHCMDiversified Away100%
0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Pono and HCM is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pono Capital Two and HCM Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCM Acquisition Corp and Pono 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 Pono Capital Two are associated (or correlated) with HCM Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCM Acquisition Corp has no effect on the direction of Pono Capital i.e., Pono Capital and HCM Acquisition go up and down completely randomly.

Pair Corralation between Pono Capital and HCM Acquisition

If you would invest  2.06  in HCM Acquisition Corp on October 7, 2024 and sell it today you would earn a total of  0.00  from holding HCM Acquisition Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Pono Capital Two  vs.  HCM Acquisition Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50050100150200250300
JavaScript chart by amCharts 3.21.15PTWOU HCMAW
       Timeline  
Pono Capital Two 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pono Capital Two has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pono Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
HCM Acquisition Corp 

Risk-Adjusted Performance

0 of 100

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

Pono Capital and HCM Acquisition Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-25.54-19.13-12.72-6.30.076.4412.7719.2125.65 0.0010.0020.0030.0040.0050.006
JavaScript chart by amCharts 3.21.15PTWOU HCMAW
       Returns  

Pair Trading with Pono Capital and HCM Acquisition

The main advantage of trading using opposite Pono Capital and HCM Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pono Capital position performs unexpectedly, HCM 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 HCM Acquisition will offset losses from the drop in HCM Acquisition's long position.
The idea behind Pono Capital Two and HCM 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities