Correlation Between Golden Star and Motive Capital

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

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

Diversification Opportunities for Golden Star and Motive Capital

0.45

Correlation Coefficient

Golden Star  Motive Capital

Very weak diversification

The 3 months correlation between Golden and Motive is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and Motive Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motive Capital Corp and Golden Star 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 Golden Star Acquisition are associated (or correlated) with Motive Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motive Capital Corp has no effect on the direction of Golden Star i.e., Golden Star and Motive Capital go up and down completely randomly.

Pair Corralation between Golden Star and Motive Capital

If you would invest  1,105  in Golden Star Acquisition on September 16, 2024 and sell it today you would earn a total of  44.00  from holding Golden Star Acquisition or generate 3.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.33%
Values	Daily Returns

Golden Star Acquisition  vs.  Motive Capital Corp

Golden Star Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Star is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Motive Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Golden Star and Motive Capital

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

The idea behind Golden Star Acquisition and Motive Capital 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.