Correlation Between GM and Moringa Acquisition
Can any of the company-specific risk be diversified away by investing in both GM and Moringa 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 GM and Moringa Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Moringa Acquisition Corp, you can compare the effects of market volatilities on GM and Moringa 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 GM with a short position of Moringa Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Moringa Acquisition.
Diversification Opportunities for GM and Moringa Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Moringa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Moringa Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moringa Acquisition Corp and GM 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 General Motors are associated (or correlated) with Moringa Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moringa Acquisition Corp has no effect on the direction of GM i.e., GM and Moringa Acquisition go up and down completely randomly.
Pair Corralation between GM and Moringa Acquisition
Allowing for the 90-day total investment horizon GM is expected to generate 56.83 times less return on investment than Moringa Acquisition. But when comparing it to its historical volatility, General Motors is 60.84 times less risky than Moringa Acquisition. It trades about 0.12 of its potential returns per unit of risk. Moringa Acquisition Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Moringa Acquisition Corp on August 28, 2024 and sell it today you would lose (4.00) from holding Moringa Acquisition Corp or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 36.84% |
| Values | Daily Returns |
General Motors vs. Moringa Acquisition Corp
Performance |
| Timeline |
| General Motors |
| Moringa Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Moringa Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Moringa Acquisition
The main advantage of trading using opposite GM and Moringa Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Moringa 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 Moringa Acquisition will offset losses from the drop in Moringa Acquisition's long position.The idea behind General Motors and Moringa Acquisition Corp 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.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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