Correlation Between RMG Acquisition and Green Star
Can any of the company-specific risk be diversified away by investing in both RMG Acquisition and Green Star 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 RMG Acquisition and Green Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMG Acquisition Corp and Green Star Products, you can compare the effects of market volatilities on RMG Acquisition and Green Star 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 RMG Acquisition with a short position of Green Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMG Acquisition and Green Star.
Diversification Opportunities for RMG Acquisition and Green Star
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RMG and Green is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding RMG Acquisition Corp and Green Star Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Star Products and RMG 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 RMG Acquisition Corp are associated (or correlated) with Green Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Star Products has no effect on the direction of RMG Acquisition i.e., RMG Acquisition and Green Star go up and down completely randomly.
Pair Corralation between RMG Acquisition and Green Star
If you would invest 0.11 in Green Star Products on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Green Star Products or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
RMG Acquisition Corp vs. Green Star Products
Performance |
| Timeline |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Green Star Products |
RMG Acquisition and Green Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMG Acquisition and Green Star
The main advantage of trading using opposite RMG Acquisition and Green Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMG Acquisition position performs unexpectedly, Green Star 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 Green Star will offset losses from the drop in Green Star's long position.| RMG Acquisition vs. First Watch Restaurant | RMG Acquisition vs. RCI Hospitality Holdings | RMG Acquisition vs. Radcom | RMG Acquisition vs. Sphere Entertainment Co |
| Green Star vs. Akzo Nobel NV | Green Star vs. Avoca LLC | Green Star vs. Arkema SA ADR | Green Star vs. HUMANA INC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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