Correlation Between Kairous Acquisition and Globalink Investment
Can any of the company-specific risk be diversified away by investing in both Kairous Acquisition and Globalink Investment 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 Kairous Acquisition and Globalink Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kairous Acquisition Corp and Globalink Investment Rights, you can compare the effects of market volatilities on Kairous Acquisition and Globalink Investment 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 Kairous Acquisition with a short position of Globalink Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kairous Acquisition and Globalink Investment.
Diversification Opportunities for Kairous Acquisition and Globalink Investment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kairous and Globalink is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kairous Acquisition Corp and Globalink Investment Rights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment and Kairous Acquisition 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 Kairous Acquisition Corp are associated (or correlated) with Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment has no effect on the direction of Kairous Acquisition i.e., Kairous Acquisition and Globalink Investment go up and down completely randomly.
Pair Corralation between Kairous Acquisition and Globalink Investment
Assuming the 90 days horizon Kairous Acquisition is expected to generate 1.22 times less return on investment than Globalink Investment. But when comparing it to its historical volatility, Kairous Acquisition Corp is 1.09 times less risky than Globalink Investment. It trades about 0.21 of its potential returns per unit of risk. Globalink Investment Rights is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 8.50 in Globalink Investment Rights on September 1, 2024 and sell it today you would earn a total of 6.50 from holding Globalink Investment Rights or generate 76.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.89% |
| Values | Daily Returns |
Kairous Acquisition Corp vs. Globalink Investment Rights
Performance |
| Timeline |
| Kairous Acquisition Corp |
| Globalink Investment |
Kairous Acquisition and Globalink Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kairous Acquisition and Globalink Investment
The main advantage of trading using opposite Kairous Acquisition and Globalink Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kairous Acquisition position performs unexpectedly, Globalink Investment 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 Globalink Investment will offset losses from the drop in Globalink Investment's long position.The idea behind Kairous Acquisition Corp and Globalink Investment Rights 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.| Globalink Investment vs. Scully Royalty | Globalink Investment vs. Donnelley Financial Solutions | Globalink Investment vs. Heritage Global | Globalink Investment vs. Oppenheimer Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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