Correlation Between Enterprise and Graf Acquisition

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

By analyzing existing cross correlation between Enterprise 40 Technology and Graf Acquisition Corp, you can compare the effects of market volatilities on Enterprise and Graf 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 Enterprise with a short position of Graf Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise and Graf Acquisition.

Diversification Opportunities for Enterprise and Graf Acquisition

0.0

Correlation Coefficient

Enterprise  Graf Acquisition

Pay attention - limited upside

The 3 months correlation between Enterprise and Graf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise 40 Technology and Graf Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graf Acquisition Corp and Enterprise 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 Enterprise 40 Technology are associated (or correlated) with Graf Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graf Acquisition Corp has no effect on the direction of Enterprise i.e., Enterprise and Graf Acquisition go up and down completely randomly.

Pair Corralation between Enterprise and Graf Acquisition

If you would invest (100.00) in Graf Acquisition Corp on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Graf Acquisition Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enterprise 40 Technology  vs.  Graf Acquisition Corp

Enterprise 40 Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enterprise 40 Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Enterprise is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Graf Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graf Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Graf Acquisition is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Enterprise and Graf Acquisition

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

The idea behind Enterprise 40 Technology and Graf 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.