Correlation Between HHG Capital and TENX KEANE

Can any of the company-specific risk be diversified away by investing in both HHG Capital and TENX KEANE 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 HHG Capital and TENX KEANE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HHG Capital Corp and TENX KEANE ACQUISITION, you can compare the effects of market volatilities on HHG Capital and TENX KEANE 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 HHG Capital with a short position of TENX KEANE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HHG Capital and TENX KEANE.

Diversification Opportunities for HHG Capital and TENX KEANE

0.2

Correlation Coefficient

HHG Capital  TENX KEANE

Modest diversification

The 3 months correlation between HHG and TENX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding HHG Capital Corp and TENX KEANE ACQUISITION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TENX KEANE ACQUISITION and HHG 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 HHG Capital Corp are associated (or correlated) with TENX KEANE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TENX KEANE ACQUISITION has no effect on the direction of HHG Capital i.e., HHG Capital and TENX KEANE go up and down completely randomly.

Pair Corralation between HHG Capital and TENX KEANE

Given the investment horizon of 90 days HHG Capital is expected to generate 8.08 times less return on investment than TENX KEANE. But when comparing it to its historical volatility, HHG Capital Corp is 6.7 times less risky than TENX KEANE. It trades about 0.03 of its potential returns per unit of risk. TENX KEANE ACQUISITION is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,021  in TENX KEANE ACQUISITION on June 21, 2024 and sell it today you would lose (701.00) from holding TENX KEANE ACQUISITION or give up 68.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.95%
Values	Daily Returns

HHG Capital Corp  vs.  TENX KEANE ACQUISITION

HHG Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HHG Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, HHG Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

TENX KEANE ACQUISITION

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days TENX KEANE ACQUISITION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite fragile basic indicators, TENX KEANE disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HHG Capital and TENX KEANE

The main advantage of trading using opposite HHG Capital and TENX KEANE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HHG Capital position performs unexpectedly, TENX KEANE 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 TENX KEANE will offset losses from the drop in TENX KEANE's long position.

The idea behind HHG Capital Corp and TENX KEANE ACQUISITION 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.