Correlation Between Gores Holdings and Atlantic Coastal
Can any of the company-specific risk be diversified away by investing in both Gores Holdings and Atlantic Coastal 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 Atlantic Coastal 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 Atlantic Coastal Acquisition, you can compare the effects of market volatilities on Gores Holdings and Atlantic Coastal 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 Atlantic Coastal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and Atlantic Coastal.
Diversification Opportunities for Gores Holdings and Atlantic Coastal
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gores and Atlantic is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Atlantic Coastal Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Coastal Acq 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 Atlantic Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Coastal Acq has no effect on the direction of Gores Holdings i.e., Gores Holdings and Atlantic Coastal go up and down completely randomly.
Pair Corralation between Gores Holdings and Atlantic Coastal
Assuming the 90 days horizon Gores Holdings IX is expected to generate 0.06 times more return on investment than Atlantic Coastal. However, Gores Holdings IX is 17.28 times less risky than Atlantic Coastal. It trades about -0.23 of its potential returns per unit of risk. Atlantic Coastal Acquisition is currently generating about -0.5 per unit of risk. If you would invest 1,059 in Gores Holdings IX on September 3, 2024 and sell it today you would lose (28.00) from holding Gores Holdings IX or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 40.0% |
| Values | Daily Returns |
Gores Holdings IX vs. Atlantic Coastal Acquisition
Performance |
| Timeline |
| Gores Holdings IX |
| Atlantic Coastal Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gores Holdings and Atlantic Coastal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gores Holdings and Atlantic Coastal
The main advantage of trading using opposite Gores Holdings and Atlantic Coastal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gores Holdings position performs unexpectedly, Atlantic Coastal 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 Atlantic Coastal will offset losses from the drop in Atlantic Coastal's long position.The idea behind Gores Holdings IX and Atlantic Coastal Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atlantic Coastal vs. Gores Holdings IX | Atlantic Coastal vs. Papaya Growth Opportunity | Atlantic Coastal vs. Consilium Acquisition I | Atlantic Coastal vs. Cartica Acquisition 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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