Correlation Between Golden Arrow and Finnovate Acquisition
Can any of the company-specific risk be diversified away by investing in both Golden Arrow and Finnovate Acquisition 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 Finnovate Acquisition 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 Finnovate Acquisition Corp, you can compare the effects of market volatilities on Golden Arrow and Finnovate Acquisition 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 Finnovate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Arrow and Finnovate Acquisition.
Diversification Opportunities for Golden Arrow and Finnovate Acquisition
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Finnovate is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Golden Arrow Merger and Finnovate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnovate Acquisition 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 Finnovate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnovate Acquisition has no effect on the direction of Golden Arrow i.e., Golden Arrow and Finnovate Acquisition go up and down completely randomly.
Pair Corralation between Golden Arrow and Finnovate Acquisition
Assuming the 90 days horizon Golden Arrow Merger is expected to generate 1.21 times more return on investment than Finnovate Acquisition. However, Golden Arrow is 1.21 times more volatile than Finnovate Acquisition Corp. It trades about 0.28 of its potential returns per unit of risk. Finnovate Acquisition Corp is currently generating about 0.24 per unit of risk. If you would invest 17.00 in Golden Arrow Merger on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Golden Arrow Merger or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 34.38% |
| Values | Daily Returns |
Golden Arrow Merger vs. Finnovate Acquisition Corp
Performance |
| Timeline |
| Golden Arrow Merger |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Finnovate Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Golden Arrow and Finnovate Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Arrow and Finnovate Acquisition
The main advantage of trading using opposite Golden Arrow and Finnovate Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Arrow position performs unexpectedly, Finnovate Acquisition 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 Finnovate Acquisition will offset losses from the drop in Finnovate Acquisition's long position.The idea behind Golden Arrow Merger and Finnovate Acquisition Corp 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.| Finnovate Acquisition vs. ClimateRock Class A | Finnovate Acquisition vs. CF Acquisition VII | Finnovate Acquisition vs. DP Cap Acquisition |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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