Correlation Between Greencity Acquisition and Cars

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

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

Diversification Opportunities for Greencity Acquisition and Cars

0.49

Correlation Coefficient

Greencity Acquisition  Cars

Very weak diversification

The 3 months correlation between Greencity and Cars is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Greencity Acquisition Corp and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and Greencity Acquisition 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 Greencity Acquisition Corp are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Greencity Acquisition i.e., Greencity Acquisition and Cars go up and down completely randomly.

Pair Corralation between Greencity Acquisition and Cars

If you would invest  1,146  in Greencity Acquisition Corp on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Greencity Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Greencity Acquisition Corp  vs.  Cars Inc

Greencity Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cars Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cars Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Cars may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Greencity Acquisition and Cars

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

The idea behind Greencity Acquisition Corp and Cars 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.