Correlation Between Fat Projects and Greencity Acquisition

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

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

Diversification Opportunities for Fat Projects and Greencity Acquisition

0.4

Correlation Coefficient

Fat Projects  Greencity Acquisition

Very weak diversification

The 3 months correlation between Fat and Greencity is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fat Projects Acquisition and Greencity Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencity Acquisition and Fat Projects 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 Fat Projects Acquisition are associated (or correlated) with Greencity Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencity Acquisition has no effect on the direction of Fat Projects i.e., Fat Projects and Greencity Acquisition go up and down completely randomly.

Pair Corralation between Fat Projects and Greencity Acquisition

If you would invest  1,105  in Greencity Acquisition Corp on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Greencity Acquisition Corp or generate 0.0% return on investment over 90 days.

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

Fat Projects Acquisition  vs.  Greencity Acquisition Corp

Fat Projects Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fat Projects Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Fat Projects is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Greencity Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greencity Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Greencity Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fat Projects and Greencity Acquisition

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

The idea behind Fat Projects Acquisition and Greencity 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.