Correlation Between GAMC Old and Genesis Unicorn

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

By analyzing existing cross correlation between GAMC Old and Genesis Unicorn Capital, you can compare the effects of market volatilities on GAMC Old and Genesis Unicorn 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 GAMC Old with a short position of Genesis Unicorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMC Old and Genesis Unicorn.

Diversification Opportunities for GAMC Old and Genesis Unicorn

0.21

Correlation Coefficient

GAMC Old  Genesis Unicorn

Modest diversification

The 3 months correlation between GAMC and Genesis is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GAMC Old and Genesis Unicorn Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Unicorn Capital and GAMC Old 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 GAMC Old are associated (or correlated) with Genesis Unicorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Unicorn Capital has no effect on the direction of GAMC Old i.e., GAMC Old and Genesis Unicorn go up and down completely randomly.

Pair Corralation between GAMC Old and Genesis Unicorn

Given the investment horizon of 90 days GAMC Old is expected to under-perform the Genesis Unicorn. In addition to that, GAMC Old is 3.81 times more volatile than Genesis Unicorn Capital. It trades about -0.06 of its total potential returns per unit of risk. Genesis Unicorn Capital is currently generating about 0.02 per unit of volatility. If you would invest  1,030  in Genesis Unicorn Capital on October 10, 2024 and sell it today you would earn a total of  17.00  from holding Genesis Unicorn Capital or generate 1.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	32.17%
Values	Daily Returns

GAMC Old  vs.  Genesis Unicorn Capital

GAMC Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, GAMC Old is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Genesis Unicorn Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GAMC Old and Genesis Unicorn

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

The idea behind GAMC Old and Genesis Unicorn Capital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..