Correlation Between Gores Holdings and PowerUp Acquisition
Can any of the company-specific risk be diversified away by investing in both Gores Holdings and PowerUp 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 PowerUp 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 PowerUp Acquisition Corp, you can compare the effects of market volatilities on Gores Holdings and PowerUp 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 PowerUp Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and PowerUp Acquisition.
Diversification Opportunities for Gores Holdings and PowerUp Acquisition
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gores and PowerUp is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and PowerUp Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerUp Acquisition Corp 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 PowerUp Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerUp Acquisition Corp has no effect on the direction of Gores Holdings i.e., Gores Holdings and PowerUp Acquisition go up and down completely randomly.
Pair Corralation between Gores Holdings and PowerUp Acquisition
Given the investment horizon of 90 days Gores Holdings IX is expected to under-perform the PowerUp Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Gores Holdings IX is 2.03 times less risky than PowerUp Acquisition. The stock trades about -0.3 of its potential returns per unit of risk. The PowerUp Acquisition Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,169 in PowerUp Acquisition Corp on August 29, 2024 and sell it today you would lose (19.00) from holding PowerUp Acquisition Corp or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gores Holdings IX vs. PowerUp Acquisition Corp
Performance |
| Timeline |
| Gores Holdings IX |
| PowerUp Acquisition Corp |
Gores Holdings and PowerUp Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gores Holdings and PowerUp Acquisition
The main advantage of trading using opposite Gores Holdings and PowerUp Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gores Holdings position performs unexpectedly, PowerUp 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 PowerUp Acquisition will offset losses from the drop in PowerUp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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