Correlation Between Black Hills and Jaws Hurricane

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

Diversification Opportunities for Black Hills and Jaws Hurricane

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Black and Jaws is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills and Jaws Hurricane Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaws Hurricane Acqui and Black Hills 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 Black Hills are associated (or correlated) with Jaws Hurricane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaws Hurricane Acqui has no effect on the direction of Black Hills i.e., Black Hills and Jaws Hurricane go up and down completely randomly.

Pair Corralation between Black Hills and Jaws Hurricane

If you would invest  5,933  in Black Hills on August 30, 2024 and sell it today you would earn a total of  461.00  from holding Black Hills or generate 7.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.35%
ValuesDaily Returns

Black Hills  vs.  Jaws Hurricane Acquisition

 Performance 
       Timeline  
Black Hills 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Black Hills are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward-looking signals, Black Hills may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Jaws Hurricane Acqui 

Risk-Adjusted Performance

0 of 100

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

Black Hills and Jaws Hurricane Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Black Hills and Jaws Hurricane

The main advantage of trading using opposite Black Hills and Jaws Hurricane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Hills position performs unexpectedly, Jaws Hurricane 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 Jaws Hurricane will offset losses from the drop in Jaws Hurricane's long position.
The idea behind Black Hills and Jaws Hurricane Acquisition 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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