Correlation Between Golden Arrow and Digital Health
Can any of the company-specific risk be diversified away by investing in both Golden Arrow and Digital Health 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 Golden Arrow and Digital Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Arrow Merger and Digital Health Acquisition, you can compare the effects of market volatilities on Golden Arrow and Digital Health 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 Golden Arrow with a short position of Digital Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Arrow and Digital Health.
Diversification Opportunities for Golden Arrow and Digital Health
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Digital is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Golden Arrow Merger and Digital Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Health Acqui and Golden Arrow 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 Golden Arrow Merger are associated (or correlated) with Digital Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Health Acqui has no effect on the direction of Golden Arrow i.e., Golden Arrow and Digital Health go up and down completely randomly.
Pair Corralation between Golden Arrow and Digital Health
Given the investment horizon of 90 days Golden Arrow Merger is expected to under-perform the Digital Health. In addition to that, Golden Arrow is 1.54 times more volatile than Digital Health Acquisition. It trades about -0.17 of its total potential returns per unit of risk. Digital Health Acquisition is currently generating about -0.21 per unit of volatility. If you would invest 1,734 in Digital Health Acquisition on September 1, 2024 and sell it today you would lose (523.00) from holding Digital Health Acquisition or give up 30.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 28.07% |
| Values | Daily Returns |
Golden Arrow Merger vs. Digital Health Acquisition
Performance |
| Timeline |
| Golden Arrow Merger |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Digital Health Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Golden Arrow and Digital Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Arrow and Digital Health
The main advantage of trading using opposite Golden Arrow and Digital Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Arrow position performs unexpectedly, Digital Health 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 Digital Health will offset losses from the drop in Digital Health's long position.The idea behind Golden Arrow Merger and Digital Health Acquisition 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.| Digital Health vs. Insight Acquisition Corp | Digital Health vs. AlphaVest Acquisition Corp | Digital Health vs. Oak Woods Acquisition | Digital Health vs. Insight 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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