Correlation Between Gores Holdings and Home Plate

Can any of the company-specific risk be diversified away by investing in both Gores Holdings and Home Plate 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 Home Plate 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 Home Plate Acquisition, you can compare the effects of market volatilities on Gores Holdings and Home Plate 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 Home Plate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and Home Plate.

Diversification Opportunities for Gores Holdings and Home Plate

-0.74

Correlation Coefficient

Gores Holdings  Home Plate

Pay attention - limited upside

The 3 months correlation between Gores and Home is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Home Plate Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Plate Acquisition 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 Home Plate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Plate Acquisition has no effect on the direction of Gores Holdings i.e., Gores Holdings and Home Plate go up and down completely randomly.

Pair Corralation between Gores Holdings and Home Plate

If you would invest  1,030  in Home Plate Acquisition on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Home Plate Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	6.67%
Values	Daily Returns

Gores Holdings IX  vs.  Home Plate Acquisition

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.

Home Plate Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Plate Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Home Plate is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gores Holdings and Home Plate

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

The idea behind Gores Holdings IX and Home Plate Acquisition 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.