Correlation Between Grab Holdings and Latch

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

By analyzing existing cross correlation between Grab Holdings Limited and Latch Inc, you can compare the effects of market volatilities on Grab Holdings and Latch 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 Grab Holdings with a short position of Latch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grab Holdings and Latch.

Diversification Opportunities for Grab Holdings and Latch

0.0

Correlation Coefficient

Grab Holdings  Latch

Pay attention - limited upside

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

Pair Corralation between Grab Holdings and Latch

If you would invest  42.00  in Grab Holdings Limited on December 19, 2024 and sell it today you would earn a total of  6.00  from holding Grab Holdings Limited or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Grab Holdings Limited  vs.  Latch Inc

Grab Holdings Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grab Holdings Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Grab Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Latch Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Grab Holdings and Latch

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

The idea behind Grab Holdings Limited and Latch Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.