Correlation Between GigCapital5 and TLG Acquisition

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

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

Diversification Opportunities for GigCapital5 and TLG Acquisition

-0.11

Correlation Coefficient

GigCapital5  TLG Acquisition

Good diversification

The 3 months correlation between GigCapital5 and TLG is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GigCapital5 and TLG Acquisition One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TLG Acquisition One 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 TLG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TLG Acquisition One has no effect on the direction of GigCapital5 i.e., GigCapital5 and TLG Acquisition go up and down completely randomly.

Pair Corralation between GigCapital5 and TLG Acquisition

If you would invest  941.00  in TLG Acquisition One on October 26, 2024 and sell it today you would earn a total of  0.00  from holding TLG Acquisition One or generate 0.0% return on investment over 90 days.

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

GigCapital5  vs.  TLG Acquisition One

GigCapital5

Risk-Adjusted Performance

0 of 100

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 newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TLG Acquisition One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TLG Acquisition One has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, TLG Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GigCapital5 and TLG Acquisition

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

The idea behind GigCapital5 and TLG Acquisition One 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.