Correlation Between Growth For and Sound Point
Can any of the company-specific risk be diversified away by investing in both Growth For and Sound Point 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 Growth For and Sound Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth For Good and Sound Point Acquisition, you can compare the effects of market volatilities on Growth For and Sound Point 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 Growth For with a short position of Sound Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth For and Sound Point.
Diversification Opportunities for Growth For and Sound Point
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Sound is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Growth For Good and Sound Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Point Acquisition and Growth For 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 Growth For Good are associated (or correlated) with Sound Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Point Acquisition has no effect on the direction of Growth For i.e., Growth For and Sound Point go up and down completely randomly.
Pair Corralation between Growth For and Sound Point
Given the investment horizon of 90 days Growth For Good is expected to generate 0.29 times more return on investment than Sound Point. However, Growth For Good is 3.51 times less risky than Sound Point. It trades about 0.17 of its potential returns per unit of risk. Sound Point Acquisition is currently generating about 0.04 per unit of risk. If you would invest 1,002 in Growth For Good on August 26, 2024 and sell it today you would earn a total of 45.00 from holding Growth For Good or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.28% |
| Values | Daily Returns |
Growth For Good vs. Sound Point Acquisition
Performance |
| Timeline |
| Growth For Good |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sound Point Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Growth For and Sound Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth For and Sound Point
The main advantage of trading using opposite Growth For and Sound Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth For position performs unexpectedly, Sound Point 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 Sound Point will offset losses from the drop in Sound Point's long position.| Growth For vs. Finnovate Acquisition Corp | Growth For vs. Broad Capital Acquisition | Growth For vs. Welsbach Technology Metals | Growth For vs. Gores Holdings IX |
| Sound Point vs. Patria Latin American | Sound Point vs. Rf Acquisition Corp | Sound Point vs. Valuence Merger 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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