Correlation Between Malacca Straits and Greencity Acquisition
Can any of the company-specific risk be diversified away by investing in both Malacca Straits and Greencity 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 Malacca Straits and Greencity Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malacca Straits Acq and Greencity Acquisition Corp, you can compare the effects of market volatilities on Malacca Straits and Greencity 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 Malacca Straits with a short position of Greencity Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malacca Straits and Greencity Acquisition.
Diversification Opportunities for Malacca Straits and Greencity Acquisition
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Malacca and Greencity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Malacca Straits Acq and Greencity Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencity Acquisition and Malacca Straits 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 Malacca Straits Acq are associated (or correlated) with Greencity Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencity Acquisition has no effect on the direction of Malacca Straits i.e., Malacca Straits and Greencity Acquisition go up and down completely randomly.
Pair Corralation between Malacca Straits and Greencity Acquisition
Assuming the 90 days horizon Malacca Straits is expected to generate 1.59 times less return on investment than Greencity Acquisition. In addition to that, Malacca Straits is 2.0 times more volatile than Greencity Acquisition Corp. It trades about 0.03 of its total potential returns per unit of risk. Greencity Acquisition Corp is currently generating about 0.09 per unit of volatility. If you would invest 1,066 in Greencity Acquisition Corp on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Greencity Acquisition Corp or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.52% |
| Values | Daily Returns |
Malacca Straits Acq vs. Greencity Acquisition Corp
Performance |
| Timeline |
| Malacca Straits Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Greencity Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Malacca Straits and Greencity Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malacca Straits and Greencity Acquisition
The main advantage of trading using opposite Malacca Straits and Greencity Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malacca Straits position performs unexpectedly, Greencity 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 Greencity Acquisition will offset losses from the drop in Greencity Acquisition's long position.The idea behind Malacca Straits Acq and Greencity 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.| Greencity Acquisition vs. Grupo Simec SAB | Greencity Acquisition vs. Coty Inc | Greencity Acquisition vs. United Guardian | Greencity Acquisition vs. Kaiser Aluminum |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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