Correlation Between GigCapital5 and Sound Point
Can any of the company-specific risk be diversified away by investing in both GigCapital5 and Sound Point 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 GigCapital5 and Sound Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigCapital5 and Sound Point Acquisition, you can compare the effects of market volatilities on GigCapital5 and Sound Point 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 GigCapital5 with a short position of Sound Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigCapital5 and Sound Point.
Diversification Opportunities for GigCapital5 and Sound Point
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between GigCapital5 and Sound is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GigCapital5 and Sound Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Point Acquisition and GigCapital5 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 GigCapital5 are associated (or correlated) with Sound Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Point Acquisition has no effect on the direction of GigCapital5 i.e., GigCapital5 and Sound Point go up and down completely randomly.
Pair Corralation between GigCapital5 and Sound Point
Assuming the 90 days horizon GigCapital5 is expected to generate 20.51 times more return on investment than Sound Point. However, GigCapital5 is 20.51 times more volatile than Sound Point Acquisition. It trades about 0.04 of its potential returns per unit of risk. Sound Point Acquisition is currently generating about 0.03 per unit of risk. If you would invest 1.80 in GigCapital5 on August 30, 2024 and sell it today you would lose (0.65) from holding GigCapital5 or give up 36.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.15% |
| Values | Daily Returns |
GigCapital5 vs. Sound Point Acquisition
Performance |
| Timeline |
| GigCapital5 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sound Point Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GigCapital5 and Sound Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigCapital5 and Sound Point
The main advantage of trading using opposite GigCapital5 and Sound Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigCapital5 position performs unexpectedly, Sound Point 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 Sound Point will offset losses from the drop in Sound Point's long position.| GigCapital5 vs. Valneva SE ADR | GigCapital5 vs. Payoneer Global | GigCapital5 vs. Uber Technologies | GigCapital5 vs. Usio Inc |
| Sound Point vs. Patria Latin American | Sound Point vs. Rf Acquisition Corp | Sound Point vs. Valuence Merger 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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