Correlation Between Loews Corp and Bannix Acquisition

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Loews Corp and Bannix 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 Loews Corp and Bannix Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Bannix Acquisition Corp, you can compare the effects of market volatilities on Loews Corp and Bannix 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 Loews Corp with a short position of Bannix Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Bannix Acquisition.

Diversification Opportunities for Loews Corp and Bannix Acquisition

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Loews and Bannix is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Bannix Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bannix Acquisition Corp and Loews Corp 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 Loews Corp are associated (or correlated) with Bannix Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bannix Acquisition Corp has no effect on the direction of Loews Corp i.e., Loews Corp and Bannix Acquisition go up and down completely randomly.

Pair Corralation between Loews Corp and Bannix Acquisition

Taking into account the 90-day investment horizon Loews Corp is expected to generate 4.42 times more return on investment than Bannix Acquisition. However, Loews Corp is 4.42 times more volatile than Bannix Acquisition Corp. It trades about 0.1 of its potential returns per unit of risk. Bannix Acquisition Corp is currently generating about 0.0 per unit of risk. If you would invest  7,575  in Loews Corp on September 1, 2024 and sell it today you would earn a total of  1,098  from holding Loews Corp or generate 14.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Loews Corp  vs.  Bannix Acquisition Corp

 Performance 
       Timeline  
Loews Corp 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Loews Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Loews Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Bannix Acquisition Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bannix Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Bannix Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Loews Corp and Bannix Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Loews Corp and Bannix Acquisition

The main advantage of trading using opposite Loews Corp and Bannix Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp position performs unexpectedly, Bannix 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 Bannix Acquisition will offset losses from the drop in Bannix Acquisition's long position.
The idea behind Loews Corp and Bannix 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges