Correlation Between Forum Merger and Motive Capital
Can any of the company-specific risk be diversified away by investing in both Forum Merger and Motive 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 Forum Merger and Motive Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Merger IV and Motive Capital Corp, you can compare the effects of market volatilities on Forum Merger and Motive 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 Forum Merger with a short position of Motive Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Merger and Motive Capital.
Diversification Opportunities for Forum Merger and Motive Capital
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forum and Motive is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Forum Merger IV and Motive Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motive Capital Corp and Forum Merger 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 Forum Merger IV are associated (or correlated) with Motive Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motive Capital Corp has no effect on the direction of Forum Merger i.e., Forum Merger and Motive Capital go up and down completely randomly.
Pair Corralation between Forum Merger and Motive Capital
Given the investment horizon of 90 days Forum Merger IV is expected to generate 1.35 times more return on investment than Motive Capital. However, Forum Merger is 1.35 times more volatile than Motive Capital Corp. It trades about 0.15 of its potential returns per unit of risk. Motive Capital Corp is currently generating about 0.19 per unit of risk. If you would invest 995.00 in Forum Merger IV on September 28, 2024 and sell it today you would earn a total of 41.00 from holding Forum Merger IV or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.81% |
| Values | Daily Returns |
Forum Merger IV vs. Motive Capital Corp
Performance |
| Timeline |
| Forum Merger IV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Motive Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Forum Merger and Motive Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Merger and Motive Capital
The main advantage of trading using opposite Forum Merger and Motive Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Merger position performs unexpectedly, Motive 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 Motive Capital will offset losses from the drop in Motive Capital's long position.| Forum Merger vs. Welsbach Technology Metals | Forum Merger vs. Broad Capital Acquisition | Forum Merger vs. Finnovate Acquisition Corp |
| Motive Capital vs. Mars Acquisition Corp | Motive Capital vs. Israel Acquisitions Corp | Motive Capital vs. Golden Star Acquisition | Motive Capital vs. Consilium Acquisition I |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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