Correlation Between Gores Holdings and AIB Acquisition

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

Diversification Opportunities for Gores Holdings and AIB Acquisition

-0.31

Correlation Coefficient

Gores Holdings  AIB Acquisition

Very good diversification

The 3 months correlation between Gores and AIB is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and AIB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Acquisition Corp 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 AIB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Acquisition Corp has no effect on the direction of Gores Holdings i.e., Gores Holdings and AIB Acquisition go up and down completely randomly.

Pair Corralation between Gores Holdings and AIB Acquisition

If you would invest  1,045  in Gores Holdings IX on October 6, 2024 and sell it today you would lose (14.00) from holding Gores Holdings IX or give up 1.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.34%
Values	Daily Returns

Gores Holdings IX  vs.  AIB Acquisition Corp

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 comparatively stable basic indicators, Gores Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AIB Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIB Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, AIB Acquisition 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 AIB Acquisition

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

The idea behind Gores Holdings IX and AIB 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.