Correlation Between Hennessy Capital and Altimar Acquisition

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

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

Diversification Opportunities for Hennessy Capital and Altimar Acquisition

0.12

Correlation Coefficient

Hennessy Capital  Altimar Acquisition

Average diversification

The 3 months correlation between Hennessy and Altimar is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Capital Investment and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp and Hennessy 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 Hennessy Capital Investment are associated (or correlated) with Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of Hennessy Capital i.e., Hennessy Capital and Altimar Acquisition go up and down completely randomly.

Pair Corralation between Hennessy Capital and Altimar Acquisition

If you would invest  1,067  in Hennessy Capital Investment on September 15, 2024 and sell it today you would lose (5.00) from holding Hennessy Capital Investment or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Hennessy Capital Investment  vs.  Altimar Acquisition Corp

Hennessy Capital Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hennessy Capital Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Hennessy Capital is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Altimar Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altimar Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altimar Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hennessy Capital and Altimar Acquisition

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

The idea behind Hennessy Capital Investment and Altimar 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.