Correlation Between 10X Capital and Pono Capital

Can any of the company-specific risk be diversified away by investing in both 10X Capital and Pono 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 10X Capital and Pono Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X Capital Venture and Pono Capital Two, you can compare the effects of market volatilities on 10X Capital and Pono 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 10X Capital with a short position of Pono Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X Capital and Pono Capital.

Diversification Opportunities for 10X Capital and Pono Capital

-0.33

Correlation Coefficient

10X Capital  Pono Capital

Very good diversification

The 3 months correlation between 10X and Pono is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding 10X Capital Venture and Pono Capital Two in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pono Capital Two and 10X 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 10X Capital Venture are associated (or correlated) with Pono Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pono Capital Two has no effect on the direction of 10X Capital i.e., 10X Capital and Pono Capital go up and down completely randomly.

Pair Corralation between 10X Capital and Pono Capital

Given the investment horizon of 90 days 10X Capital is expected to generate 8.28 times less return on investment than Pono Capital. But when comparing it to its historical volatility, 10X Capital Venture is 5.58 times less risky than Pono Capital. It trades about 0.03 of its potential returns per unit of risk. Pono Capital Two is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,067  in Pono Capital Two on September 4, 2024 and sell it today you would earn a total of  133.00  from holding Pono Capital Two or generate 12.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.29%
Values	Daily Returns

10X Capital Venture  vs.  Pono Capital Two

10X Capital Venture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 10X Capital Venture has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 10X Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pono Capital Two

Risk-Adjusted Performance

0 of 100

OK

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 uncertain basic indicators, Pono Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 10X Capital and Pono Capital

The main advantage of trading using opposite 10X Capital and Pono Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X Capital position performs unexpectedly, Pono 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 Pono Capital will offset losses from the drop in Pono Capital's long position.

The idea behind 10X Capital Venture and Pono Capital Two 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.