Correlation Between GiantStep and NH SPAC

Can any of the company-specific risk be diversified away by investing in both GiantStep and NH SPAC 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 GiantStep and NH SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GiantStep Co and NH SPAC 8, you can compare the effects of market volatilities on GiantStep and NH SPAC 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 GiantStep with a short position of NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GiantStep and NH SPAC.

Diversification Opportunities for GiantStep and NH SPAC

0.73

Correlation Coefficient

GiantStep  NH SPAC

Poor diversification

The 3 months correlation between GiantStep and 225570 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GiantStep Co and NH SPAC 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 8 and GiantStep 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 GiantStep Co are associated (or correlated) with NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 8 has no effect on the direction of GiantStep i.e., GiantStep and NH SPAC go up and down completely randomly.

Pair Corralation between GiantStep and NH SPAC

Assuming the 90 days trading horizon GiantStep Co is expected to under-perform the NH SPAC. In addition to that, GiantStep is 3.09 times more volatile than NH SPAC 8. It trades about 0.0 of its total potential returns per unit of risk. NH SPAC 8 is currently generating about 0.0 per unit of volatility. If you would invest  1,323,000  in NH SPAC 8 on October 26, 2024 and sell it today you would lose (3,000) from holding NH SPAC 8 or give up 0.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

GiantStep Co  vs.  NH SPAC 8

GiantStep

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GiantStep Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

NH SPAC 8

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NH SPAC 8 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with GiantStep and NH SPAC

The main advantage of trading using opposite GiantStep and NH SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GiantStep position performs unexpectedly, NH SPAC 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 NH SPAC will offset losses from the drop in NH SPAC's long position.

The idea behind GiantStep Co and NH SPAC 8 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.