Correlation Between Screaming Eagle and Hennessy Capital

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

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

Diversification Opportunities for Screaming Eagle and Hennessy Capital

0.0

Correlation Coefficient

Screaming Eagle  Hennessy Capital

Pay attention - limited upside

The 3 months correlation between Screaming and Hennessy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Screaming Eagle Acquisition and Hennessy Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Capital Inv and Screaming Eagle 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 Screaming Eagle Acquisition are associated (or correlated) with Hennessy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Capital Inv has no effect on the direction of Screaming Eagle i.e., Screaming Eagle and Hennessy Capital go up and down completely randomly.

Pair Corralation between Screaming Eagle and Hennessy Capital

If you would invest  15.00  in Hennessy Capital Investment on December 2, 2024 and sell it today you would lose (2.00) from holding Hennessy Capital Investment or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Screaming Eagle Acquisition  vs.  Hennessy Capital Investment

Screaming Eagle Acqu

Risk-Adjusted Performance

Very Weak

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

Hennessy Capital Inv

Risk-Adjusted Performance

Modest

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

Pair Trading with Screaming Eagle and Hennessy Capital

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

The idea behind Screaming Eagle Acquisition and Hennessy Capital Investment 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.