Correlation Between HNR Acquisition and CF Acquisition
Can any of the company-specific risk be diversified away by investing in both HNR Acquisition and CF 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 HNR Acquisition and CF Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNR Acquisition Corp and CF Acquisition Corp, you can compare the effects of market volatilities on HNR Acquisition and CF 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 HNR Acquisition with a short position of CF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNR Acquisition and CF Acquisition.
Diversification Opportunities for HNR Acquisition and CF Acquisition
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HNR and CFFE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding HNR Acquisition Corp and CF Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Acquisition Corp and HNR Acquisition 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 HNR Acquisition Corp are associated (or correlated) with CF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Acquisition Corp has no effect on the direction of HNR Acquisition i.e., HNR Acquisition and CF Acquisition go up and down completely randomly.
Pair Corralation between HNR Acquisition and CF Acquisition
Given the investment horizon of 90 days HNR Acquisition Corp is expected to under-perform the CF Acquisition. In addition to that, HNR Acquisition is 48.44 times more volatile than CF Acquisition Corp. It trades about -0.02 of its total potential returns per unit of risk. CF Acquisition Corp is currently generating about 0.13 per unit of volatility. If you would invest 1,034 in CF Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 46.00 from holding CF Acquisition Corp or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.75% |
| Values | Daily Returns |
HNR Acquisition Corp vs. CF Acquisition Corp
Performance |
| Timeline |
| HNR Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HNR Acquisition and CF Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNR Acquisition and CF Acquisition
The main advantage of trading using opposite HNR Acquisition and CF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNR Acquisition position performs unexpectedly, CF 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 CF Acquisition will offset losses from the drop in CF Acquisition's long position.| HNR Acquisition vs. DP Cap Acquisition | HNR Acquisition vs. A SPAC II | HNR Acquisition vs. Athena Technology Acquisition | HNR Acquisition vs. Thunder Bridge Capital |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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