Correlation Between Healthcare and HCM Acquisition
Can any of the company-specific risk be diversified away by investing in both Healthcare 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 Healthcare and HCM Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare AI Acquisition and HCM Acquisition Corp, you can compare the effects of market volatilities on Healthcare 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 Healthcare with a short position of HCM Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and HCM Acquisition.
Diversification Opportunities for Healthcare and HCM Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Healthcare and HCM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare AI Acquisition 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 Healthcare 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 Healthcare AI Acquisition 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 Healthcare i.e., Healthcare and HCM Acquisition go up and down completely randomly.
Pair Corralation between Healthcare and HCM Acquisition
If you would invest 1.60 in Healthcare AI Acquisition on October 26, 2024 and sell it today you would lose (0.48) from holding Healthcare AI Acquisition or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Healthcare AI Acquisition vs. HCM Acquisition Corp
Performance |
| Timeline |
| Healthcare AI Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| HCM Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Healthcare and HCM Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and HCM Acquisition
The main advantage of trading using opposite Healthcare and HCM Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare 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.The idea behind Healthcare AI Acquisition and HCM 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.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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