Correlation Between Crescera Capital and Hawks Acquisition
Can any of the company-specific risk be diversified away by investing in both Crescera Capital 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 Crescera Capital and Hawks Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescera Capital Acquisition and Hawks Acquisition Corp, you can compare the effects of market volatilities on Crescera Capital 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 Crescera Capital with a short position of Hawks Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescera Capital and Hawks Acquisition.
Diversification Opportunities for Crescera Capital and Hawks Acquisition
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crescera and Hawks is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Crescera Capital 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 Crescera 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 Crescera Capital 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 Crescera Capital i.e., Crescera Capital and Hawks Acquisition go up and down completely randomly.
Pair Corralation between Crescera Capital and Hawks Acquisition
Given the investment horizon of 90 days Crescera Capital Acquisition is expected to generate 5.12 times more return on investment than Hawks Acquisition. However, Crescera Capital is 5.12 times more volatile than Hawks Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. Hawks Acquisition Corp is currently generating about 0.08 per unit of risk. If you would invest 1,021 in Crescera Capital Acquisition on August 30, 2024 and sell it today you would earn a total of 69.00 from holding Crescera Capital Acquisition or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.19% |
| Values | Daily Returns |
Crescera Capital Acquisition vs. Hawks Acquisition Corp
Performance |
| Timeline |
| Crescera Capital Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hawks Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Crescera Capital and Hawks Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescera Capital and Hawks Acquisition
The main advantage of trading using opposite Crescera Capital and Hawks Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescera Capital 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 Crescera Capital 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.| Hawks Acquisition vs. International Luxury Products | Hawks Acquisition vs. Cactus Acquisition Corp | Hawks Acquisition vs. Finnovate Acquisition Corp | Hawks Acquisition vs. Welsbach Technology Metals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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