Correlation Between Gores Holdings and AXIOS Sustainable

Can any of the company-specific risk be diversified away by investing in both Gores Holdings and AXIOS Sustainable 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 Gores Holdings and AXIOS Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gores Holdings IX and AXIOS Sustainable Growth, you can compare the effects of market volatilities on Gores Holdings and AXIOS Sustainable 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 Gores Holdings with a short position of AXIOS Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and AXIOS Sustainable.

Diversification Opportunities for Gores Holdings and AXIOS Sustainable

-0.44

Correlation Coefficient

Gores Holdings  AXIOS Sustainable

Very good diversification

The 3 months correlation between Gores and AXIOS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and AXIOS Sustainable Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIOS Sustainable Growth and Gores Holdings 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 Gores Holdings IX are associated (or correlated) with AXIOS Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIOS Sustainable Growth has no effect on the direction of Gores Holdings i.e., Gores Holdings and AXIOS Sustainable go up and down completely randomly.

Pair Corralation between Gores Holdings and AXIOS Sustainable

Given the investment horizon of 90 days Gores Holdings is expected to generate 1.83 times less return on investment than AXIOS Sustainable. In addition to that, Gores Holdings is 1.45 times more volatile than AXIOS Sustainable Growth. It trades about 0.01 of its total potential returns per unit of risk. AXIOS Sustainable Growth is currently generating about 0.03 per unit of volatility. If you would invest  1,033  in AXIOS Sustainable Growth on September 28, 2024 and sell it today you would earn a total of  10.00  from holding AXIOS Sustainable Growth or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	19.25%
Values	Daily Returns

Gores Holdings IX  vs.  AXIOS Sustainable Growth

Gores Holdings IX

Risk-Adjusted Performance

0 of 100

Very Weak

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

AXIOS Sustainable Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gores Holdings and AXIOS Sustainable

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

The idea behind Gores Holdings IX and AXIOS Sustainable Growth 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 Transaction History module to view history of all your transactions and understand their impact on performance.