Correlation Between Dennys Corp and GSR III

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

By analyzing existing cross correlation between Dennys Corp and GSR III Acquisition, you can compare the effects of market volatilities on Dennys Corp and GSR III 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 Dennys Corp with a short position of GSR III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dennys Corp and GSR III.

Diversification Opportunities for Dennys Corp and GSR III

-0.5

Correlation Coefficient

Dennys Corp  GSR III

Very good diversification

The 3 months correlation between Dennys and GSR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and GSR III Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSR III Acquisition and Dennys Corp 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 Dennys Corp are associated (or correlated) with GSR III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSR III Acquisition has no effect on the direction of Dennys Corp i.e., Dennys Corp and GSR III go up and down completely randomly.

Pair Corralation between Dennys Corp and GSR III

Given the investment horizon of 90 days Dennys Corp is expected to under-perform the GSR III. In addition to that, Dennys Corp is 35.65 times more volatile than GSR III Acquisition. It trades about -0.12 of its total potential returns per unit of risk. GSR III Acquisition is currently generating about 0.16 per unit of volatility. If you would invest  988.00  in GSR III Acquisition on December 19, 2024 and sell it today you would earn a total of  12.00  from holding GSR III Acquisition or generate 1.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dennys Corp  vs.  GSR III Acquisition

Dennys Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dennys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

GSR III Acquisition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GSR III Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GSR III is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dennys Corp and GSR III

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

The idea behind Dennys Corp and GSR III Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.