Correlation Between HCM III and Highview Merger
Can any of the company-specific risk be diversified away by investing in both HCM III and Highview Merger 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 HCM III and Highview Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCM III Acquisition and Highview Merger Corp, you can compare the effects of market volatilities on HCM III and Highview Merger 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 HCM III with a short position of Highview Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCM III and Highview Merger.
Diversification Opportunities for HCM III and Highview Merger
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HCM and Highview is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding HCM III Acquisition and Highview Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highview Merger Corp and HCM III 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 HCM III Acquisition are associated (or correlated) with Highview Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highview Merger Corp has no effect on the direction of HCM III i.e., HCM III and Highview Merger go up and down completely randomly.
Pair Corralation between HCM III and Highview Merger
Assuming the 90 days horizon HCM III is expected to generate 1.19 times less return on investment than Highview Merger. But when comparing it to its historical volatility, HCM III Acquisition is 2.3 times less risky than Highview Merger. It trades about 0.14 of its potential returns per unit of risk. Highview Merger Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Highview Merger Corp on August 18, 2025 and sell it today you would earn a total of 34.00 from holding Highview Merger Corp or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCM III Acquisition vs. Highview Merger Corp
Performance |
| Timeline |
| HCM III Acquisition |
| Highview Merger Corp |
HCM III and Highview Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCM III and Highview Merger
The main advantage of trading using opposite HCM III and Highview Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCM III position performs unexpectedly, Highview Merger 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 Highview Merger will offset losses from the drop in Highview Merger's long position.| HCM III vs. Melar Acquisition Corp | HCM III vs. Copley Acquisition Corp | HCM III vs. Translational Development Acquisition | HCM III vs. Sizzle Acquisition Corp |
| Highview Merger vs. Sizzle Acquisition Corp | Highview Merger vs. Copley Acquisition Corp | Highview Merger vs. Rithm Acquisition Corp | Highview Merger vs. Perimeter Acquisition Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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