Correlation Between SHUAA Partners and GAMC Old
Can any of the company-specific risk be diversified away by investing in both SHUAA Partners and GAMC Old 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 SHUAA Partners and GAMC Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHUAA Partners Acquisition and GAMC Old, you can compare the effects of market volatilities on SHUAA Partners and GAMC Old 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 SHUAA Partners with a short position of GAMC Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHUAA Partners and GAMC Old.
Diversification Opportunities for SHUAA Partners and GAMC Old
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHUAA and GAMC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SHUAA Partners Acquisition and GAMC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMC Old and SHUAA Partners 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 SHUAA Partners Acquisition are associated (or correlated) with GAMC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMC Old has no effect on the direction of SHUAA Partners i.e., SHUAA Partners and GAMC Old go up and down completely randomly.
Pair Corralation between SHUAA Partners and GAMC Old
If you would invest (100.00) in GAMC Old on October 24, 2024 and sell it today you would earn a total of 100.00 from holding GAMC Old or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
SHUAA Partners Acquisition vs. GAMC Old
Performance |
| Timeline |
| SHUAA Partners Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| GAMC Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SHUAA Partners and GAMC Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHUAA Partners and GAMC Old
The main advantage of trading using opposite SHUAA Partners and GAMC Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHUAA Partners position performs unexpectedly, GAMC Old 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 GAMC Old will offset losses from the drop in GAMC Old's long position.The idea behind SHUAA Partners Acquisition and GAMC Old 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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