Correlation Between Gardiner Healthcare and Kairous Acquisition

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

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

Diversification Opportunities for Gardiner Healthcare and Kairous Acquisition

0.0

Correlation Coefficient

Gardiner Healthcare  Kairous Acquisition

Pay attention - limited upside

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

Pair Corralation between Gardiner Healthcare and Kairous Acquisition

Assuming the 90 days horizon Gardiner Healthcare is expected to generate 12.95 times less return on investment than Kairous Acquisition. But when comparing it to its historical volatility, Gardiner Healthcare Acquisitions is 6.53 times less risky than Kairous Acquisition. It trades about 0.08 of its potential returns per unit of risk. Kairous Acquisition Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Kairous Acquisition Corp on October 11, 2024 and sell it today you would lose (12.99) from holding Kairous Acquisition Corp or give up 64.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	31.84%
Values	Daily Returns

Gardiner Healthcare Acquisitio  vs.  Kairous Acquisition Corp

Gardiner Healthcare

Risk-Adjusted Performance

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Very Weak

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

Kairous Acquisition Corp

Risk-Adjusted Performance

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Insignificant

Over the last 90 days Kairous Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal essential indicators, Kairous Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gardiner Healthcare and Kairous Acquisition

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

The idea behind Gardiner Healthcare Acquisitions and Kairous 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.