Correlation Between Gores Holdings and Investcorp Europe
Can any of the company-specific risk be diversified away by investing in both Gores Holdings and Investcorp Europe 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 Gores Holdings and Investcorp Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gores Holdings IX and Investcorp Europe Acquisition, you can compare the effects of market volatilities on Gores Holdings and Investcorp Europe 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 Gores Holdings with a short position of Investcorp Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and Investcorp Europe.
Diversification Opportunities for Gores Holdings and Investcorp Europe
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gores and Investcorp is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe and Gores Holdings 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 Gores Holdings IX are associated (or correlated) with Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of Gores Holdings i.e., Gores Holdings and Investcorp Europe go up and down completely randomly.
Pair Corralation between Gores Holdings and Investcorp Europe
Given the investment horizon of 90 days Gores Holdings IX is expected to under-perform the Investcorp Europe. In addition to that, Gores Holdings is 1.11 times more volatile than Investcorp Europe Acquisition. It trades about -0.02 of its total potential returns per unit of risk. Investcorp Europe Acquisition is currently generating about 0.15 per unit of volatility. If you would invest 1,056 in Investcorp Europe Acquisition on August 25, 2024 and sell it today you would earn a total of 97.00 from holding Investcorp Europe Acquisition or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gores Holdings IX vs. Investcorp Europe Acquisition
Performance |
| Timeline |
| Gores Holdings IX |
| Investcorp Europe |
Gores Holdings and Investcorp Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gores Holdings and Investcorp Europe
The main advantage of trading using opposite Gores Holdings and Investcorp Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gores Holdings position performs unexpectedly, Investcorp Europe 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 Investcorp Europe will offset losses from the drop in Investcorp Europe's long position.| Gores Holdings vs. PowerUp Acquisition Corp | Gores Holdings vs. Aurora Innovation | Gores Holdings vs. HUMANA INC | Gores Holdings vs. Aquagold International |
| Investcorp Europe vs. Bellevue Life Sciences | Investcorp Europe vs. Manaris Corp | Investcorp Europe vs. Metal Sky Star | Investcorp Europe vs. Mountain Crest 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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