Correlation Between Global Partner and GPAC Old

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

By analyzing existing cross correlation between Global Partner Acq and GPAC Old, you can compare the effects of market volatilities on Global Partner and GPAC Old 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 Global Partner with a short position of GPAC Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partner and GPAC Old.

Diversification Opportunities for Global Partner and GPAC Old

0.56

Correlation Coefficient

Global Partner  GPAC Old

Very weak diversification

The 3 months correlation between Global and GPAC is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Global Partner Acq and GPAC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPAC Old and Global Partner 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 Global Partner Acq are associated (or correlated) with GPAC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPAC Old has no effect on the direction of Global Partner i.e., Global Partner and GPAC Old go up and down completely randomly.

Pair Corralation between Global Partner and GPAC Old

If you would invest (100.00) in GPAC Old on October 10, 2024 and sell it today you would earn a total of  100.00  from holding GPAC Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Global Partner Acq  vs.  GPAC Old

Global Partner Acq

Risk-Adjusted Performance

0 of 100

Very Weak

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

GPAC Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Global Partner and GPAC Old

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

The idea behind Global Partner Acq and GPAC Old 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.