Correlation Between Embrace Change and Golden Star
Can any of the company-specific risk be diversified away by investing in both Embrace Change and Golden Star 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 Embrace Change and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embrace Change Acquisition and Golden Star Acquisition, you can compare the effects of market volatilities on Embrace Change and Golden Star 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 Embrace Change with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Golden Star.
Diversification Opportunities for Embrace Change and Golden Star
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embrace and Golden is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition and Embrace Change 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 Embrace Change Acquisition are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Embrace Change i.e., Embrace Change and Golden Star go up and down completely randomly.
Pair Corralation between Embrace Change and Golden Star
Assuming the 90 days horizon Embrace Change Acquisition is expected to generate 128.42 times more return on investment than Golden Star. However, Embrace Change is 128.42 times more volatile than Golden Star Acquisition. It trades about 0.21 of its potential returns per unit of risk. Golden Star Acquisition is currently generating about 0.03 per unit of risk. If you would invest 11.00 in Embrace Change Acquisition on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Embrace Change Acquisition or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Embrace Change Acquisition vs. Golden Star Acquisition
Performance |
| Timeline |
| Embrace Change Acqui |
| Golden Star Acquisition |
Embrace Change and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embrace Change and Golden Star
The main advantage of trading using opposite Embrace Change and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embrace Change position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star's long position.| Embrace Change vs. Visa Class A | Embrace Change vs. Diamond Hill Investment | Embrace Change vs. Distoken Acquisition | Embrace Change vs. AllianceBernstein Holding LP |
| Golden Star vs. Church Dwight | Golden Star vs. Precision Drilling | Golden Star vs. Tenaris SA ADR | Golden Star vs. ServiceNow |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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