Correlation Between Goldenstone Acquisition and Lever Global

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

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

Diversification Opportunities for Goldenstone Acquisition and Lever Global

-0.46

Correlation Coefficient

Goldenstone Acquisition  Lever Global

Very good diversification

The 3 months correlation between Goldenstone and Lever is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Goldenstone Acquisition Limite and Lever Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lever Global and Goldenstone Acquisition 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 Goldenstone Acquisition Limited are associated (or correlated) with Lever Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lever Global has no effect on the direction of Goldenstone Acquisition i.e., Goldenstone Acquisition and Lever Global go up and down completely randomly.

Pair Corralation between Goldenstone Acquisition and Lever Global

Assuming the 90 days horizon Goldenstone Acquisition Limited is expected to generate 19.0 times more return on investment than Lever Global. However, Goldenstone Acquisition is 19.0 times more volatile than Lever Global. It trades about 0.17 of its potential returns per unit of risk. Lever Global is currently generating about 0.09 per unit of risk. If you would invest  1.00  in Goldenstone Acquisition Limited on October 3, 2024 and sell it today you would earn a total of  2.00  from holding Goldenstone Acquisition Limited or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	65.44%
Values	Daily Returns

Goldenstone Acquisition Limite  vs.  Lever Global

Goldenstone Acquisition

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Goldenstone Acquisition Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Goldenstone Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Lever Global

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lever Global are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Lever Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldenstone Acquisition and Lever Global

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

The idea behind Goldenstone Acquisition Limited and Lever Global 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.