Correlation Between GAMC Old and PowerUp Acquisition

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

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

Diversification Opportunities for GAMC Old and PowerUp Acquisition

0.09

Correlation Coefficient

GAMC Old  PowerUp Acquisition

Significant diversification

The 3 months correlation between GAMC and PowerUp is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GAMC Old and PowerUp Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerUp Acquisition Corp 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 PowerUp Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerUp Acquisition Corp has no effect on the direction of GAMC Old i.e., GAMC Old and PowerUp Acquisition go up and down completely randomly.

Pair Corralation between GAMC Old and PowerUp Acquisition

Given the investment horizon of 90 days GAMC Old is expected to under-perform the PowerUp Acquisition. In addition to that, GAMC Old is 3.4 times more volatile than PowerUp Acquisition Corp. It trades about -0.06 of its total potential returns per unit of risk. PowerUp Acquisition Corp is currently generating about 0.02 per unit of volatility. If you would invest  1,041  in PowerUp Acquisition Corp on October 25, 2024 and sell it today you would earn a total of  112.00  from holding PowerUp Acquisition Corp or generate 10.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	79.11%
Values	Daily Returns

GAMC Old  vs.  PowerUp Acquisition Corp

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.

PowerUp Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PowerUp Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, PowerUp 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 GAMC Old and PowerUp Acquisition

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

The idea behind GAMC Old and PowerUp 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.

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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..