Correlation Between Golden Star and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Golden Star and Inflection 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 Golden Star and Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Star Acquisition and Inflection Point Acquisition, you can compare the effects of market volatilities on Golden Star and Inflection 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 Golden Star with a short position of Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Inflection Point.
Diversification Opportunities for Golden Star and Inflection Point
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Inflection is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and Golden Star 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 Golden Star Acquisition are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Golden Star i.e., Golden Star and Inflection Point go up and down completely randomly.
Pair Corralation between Golden Star and Inflection Point
Assuming the 90 days horizon Golden Star Acquisition is expected to under-perform the Inflection Point. But the stock apears to be less risky and, when comparing its historical volatility, Golden Star Acquisition is 14.85 times less risky than Inflection Point. The stock trades about -0.02 of its potential returns per unit of risk. The Inflection Point Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,345 in Inflection Point Acquisition on October 9, 2024 and sell it today you would earn a total of 75.00 from holding Inflection Point Acquisition or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Star Acquisition vs. Inflection Point Acquisition
Performance |
| Timeline |
| Golden Star Acquisition |
| Inflection Point Acq |
Golden Star and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and Inflection Point
The main advantage of trading using opposite Golden Star and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, Inflection 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| Golden Star vs. KKR Co LP | Golden Star vs. Blackstone Group | Golden Star vs. T Rowe Price | Golden Star vs. Apollo Global Management |
| Inflection Point vs. Thomson Reuters Corp | Inflection Point vs. Cracker Barrel Old | Inflection Point vs. GEN Restaurant Group, | Inflection Point vs. Dine Brands Global |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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