Correlation Between Gores Holdings and Metals Acquisition
Can any of the company-specific risk be diversified away by investing in both Gores Holdings and Metals 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 Gores Holdings and Metals Acquisition 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 Metals Acquisition Limited, you can compare the effects of market volatilities on Gores Holdings and Metals 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 Gores Holdings with a short position of Metals Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and Metals Acquisition.
Diversification Opportunities for Gores Holdings and Metals Acquisition
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gores and Metals is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Metals Acquisition Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Acquisition 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 Metals Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Acquisition has no effect on the direction of Gores Holdings i.e., Gores Holdings and Metals Acquisition go up and down completely randomly.
Pair Corralation between Gores Holdings and Metals Acquisition
Given the investment horizon of 90 days Gores Holdings IX is expected to under-perform the Metals Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Gores Holdings IX is 4.24 times less risky than Metals Acquisition. The stock trades about -0.28 of its potential returns per unit of risk. The Metals Acquisition Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Metals Acquisition Limited on September 13, 2024 and sell it today you would earn a total of 49.00 from holding Metals Acquisition Limited or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Gores Holdings IX vs. Metals Acquisition Limited
Performance |
| Timeline |
| Gores Holdings IX |
| Metals Acquisition |
Gores Holdings and Metals Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gores Holdings and Metals Acquisition
The main advantage of trading using opposite Gores Holdings and Metals Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gores Holdings position performs unexpectedly, Metals 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 Metals Acquisition will offset losses from the drop in Metals Acquisition's long position.| Gores Holdings vs. Consilium Acquisition I | Gores Holdings vs. Investcorp Europe Acquisition | Gores Holdings vs. Global Blockchain 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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