Correlation Between Gores Holdings and Pono Capital
Can any of the company-specific risk be diversified away by investing in both Gores Holdings and Pono Capital 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 Pono Capital 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 Pono Capital Two, you can compare the effects of market volatilities on Gores Holdings and Pono Capital 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 Pono Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and Pono Capital.
Diversification Opportunities for Gores Holdings and Pono Capital
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gores and Pono is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Pono Capital Two in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pono Capital Two 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 Pono Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pono Capital Two has no effect on the direction of Gores Holdings i.e., Gores Holdings and Pono Capital go up and down completely randomly.
Pair Corralation between Gores Holdings and Pono Capital
Given the investment horizon of 90 days Gores Holdings IX is expected to under-perform the Pono Capital. But the stock apears to be less risky and, when comparing its historical volatility, Gores Holdings IX is 17.55 times less risky than Pono Capital. The stock trades about -0.02 of its potential returns per unit of risk. The Pono Capital Two is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,275 in Pono Capital Two on August 25, 2024 and sell it today you would lose (75.00) from holding Pono Capital Two or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 74.74% |
| Values | Daily Returns |
Gores Holdings IX vs. Pono Capital Two
Performance |
| Timeline |
| Gores Holdings IX |
| Pono Capital Two |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Gores Holdings and Pono Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gores Holdings and Pono Capital
The main advantage of trading using opposite Gores Holdings and Pono Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gores Holdings position performs unexpectedly, Pono Capital 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 Pono Capital will offset losses from the drop in Pono Capital's long position.| Gores Holdings vs. PowerUp Acquisition Corp | Gores Holdings vs. Aurora Innovation | Gores Holdings vs. HUMANA INC | Gores Holdings vs. Aquagold International |
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 CEOs Directory module to screen CEOs from public companies around the world.
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