Correlation Between GigCapital5 and Financial Strategies

Can any of the company-specific risk be diversified away by investing in both GigCapital5 and Financial Strategies 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 GigCapital5 and Financial Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GigCapital5 and Financial Strategies Acquisition, you can compare the effects of market volatilities on GigCapital5 and Financial Strategies 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 GigCapital5 with a short position of Financial Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigCapital5 and Financial Strategies.

Diversification Opportunities for GigCapital5 and Financial Strategies

0.0

Correlation Coefficient

GigCapital5  Financial Strategies

Pay attention - limited upside

The 3 months correlation between GigCapital5 and Financial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GigCapital5 and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies and GigCapital5 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 GigCapital5 are associated (or correlated) with Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of GigCapital5 i.e., GigCapital5 and Financial Strategies go up and down completely randomly.

Pair Corralation between GigCapital5 and Financial Strategies

If you would invest (100.00) in Financial Strategies Acquisition on December 5, 2024 and sell it today you would earn a total of  100.00  from holding Financial Strategies Acquisition or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GigCapital5  vs.  Financial Strategies Acquisiti

GigCapital5

Risk-Adjusted Performance

Very Weak

Over the last 90 days GigCapital5 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GigCapital5 is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Financial Strategies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Financial Strategies Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Financial Strategies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GigCapital5 and Financial Strategies

The main advantage of trading using opposite GigCapital5 and Financial Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigCapital5 position performs unexpectedly, Financial Strategies 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 Financial Strategies will offset losses from the drop in Financial Strategies' long position.

The idea behind GigCapital5 and Financial Strategies 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.