Correlation Between DUET Acquisition and HHG Capital

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

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

Diversification Opportunities for DUET Acquisition and HHG Capital

-0.39

Correlation Coefficient

DUET Acquisition  HHG Capital

Very good diversification

The 3 months correlation between DUET and HHG is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DUET Acquisition Corp and HHG Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital Corp and DUET 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 DUET Acquisition Corp are associated (or correlated) with HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital Corp has no effect on the direction of DUET Acquisition i.e., DUET Acquisition and HHG Capital go up and down completely randomly.

Pair Corralation between DUET Acquisition and HHG Capital

Given the investment horizon of 90 days DUET Acquisition Corp is expected to generate 0.1 times more return on investment than HHG Capital. However, DUET Acquisition Corp is 10.29 times less risky than HHG Capital. It trades about 0.1 of its potential returns per unit of risk. HHG Capital Corp is currently generating about -0.23 per unit of risk. If you would invest  1,126  in DUET Acquisition Corp on September 15, 2024 and sell it today you would earn a total of  7.00  from holding DUET Acquisition Corp or generate 0.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.48%
Values	Daily Returns

DUET Acquisition Corp  vs.  HHG Capital Corp

DUET Acquisition Corp

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days DUET Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, DUET Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with DUET Acquisition and HHG Capital

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

The idea behind DUET Acquisition Corp and HHG Capital 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..