Correlation Between Growth For and HCM Acquisition
Can any of the company-specific risk be diversified away by investing in both Growth For 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 Growth For and HCM Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth For Good and HCM Acquisition Corp, you can compare the effects of market volatilities on Growth For 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 Growth For with a short position of HCM Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth For and HCM Acquisition.
Diversification Opportunities for Growth For and HCM Acquisition
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Growth and HCM is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Growth For Good 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 Growth For 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 Growth For Good 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 Growth For i.e., Growth For and HCM Acquisition go up and down completely randomly.
Pair Corralation between Growth For and HCM Acquisition
Given the investment horizon of 90 days Growth For Good is expected to generate 0.01 times more return on investment than HCM Acquisition. However, Growth For Good is 135.82 times less risky than HCM Acquisition. It trades about 0.28 of its potential returns per unit of risk. HCM Acquisition Corp is currently generating about -0.18 per unit of risk. If you would invest 1,029 in Growth For Good on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Growth For Good or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.17% |
| Values | Daily Returns |
Growth For Good vs. HCM Acquisition Corp
Performance |
| Timeline |
| Growth For Good |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HCM Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Growth For and HCM Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth For and HCM Acquisition
The main advantage of trading using opposite Growth For and HCM Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth For 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.| Growth For vs. Finnovate Acquisition Corp | Growth For vs. Broad Capital Acquisition | Growth For vs. Welsbach Technology Metals | Growth For vs. Gores Holdings IX |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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