Correlation Between EQRx and Grab Holdings
Can any of the company-specific risk be diversified away by investing in both EQRx and Grab Holdings 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 EQRx and Grab Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQRx Inc and Grab Holdings Limited, you can compare the effects of market volatilities on EQRx and Grab Holdings 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 EQRx with a short position of Grab Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQRx and Grab Holdings.
Diversification Opportunities for EQRx and Grab Holdings
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EQRx and Grab is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding EQRx Inc and Grab Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab Holdings Limited and EQRx 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 EQRx Inc are associated (or correlated) with Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings Limited has no effect on the direction of EQRx i.e., EQRx and Grab Holdings go up and down completely randomly.
Pair Corralation between EQRx and Grab Holdings
If you would invest 18.00 in Grab Holdings Limited on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Grab Holdings Limited or generate 177.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
EQRx Inc vs. Grab Holdings Limited
Performance |
| Timeline |
| EQRx Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Grab Holdings Limited |
EQRx and Grab Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQRx and Grab Holdings
The main advantage of trading using opposite EQRx and Grab Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQRx position performs unexpectedly, Grab Holdings 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 Grab Holdings will offset losses from the drop in Grab Holdings' long position.The idea behind EQRx Inc and Grab Holdings Limited 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.| Grab Holdings vs. Grab Holdings | Grab Holdings vs. EVgo Equity Warrants | Grab Holdings vs. Bakkt Holdings Warrant |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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