Correlation Between GSR II and Clover Leaf

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

By analyzing existing cross correlation between GSR II Meteora and Clover Leaf Capital, you can compare the effects of market volatilities on GSR II and Clover Leaf 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 GSR II with a short position of Clover Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSR II and Clover Leaf.

Diversification Opportunities for GSR II and Clover Leaf

0.18

Correlation Coefficient

GSR II  Clover Leaf

Average diversification

The 3 months correlation between GSR and Clover is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GSR II Meteora and Clover Leaf Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Leaf Capital and GSR II 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 GSR II Meteora are associated (or correlated) with Clover Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Leaf Capital has no effect on the direction of GSR II i.e., GSR II and Clover Leaf go up and down completely randomly.

Pair Corralation between GSR II and Clover Leaf

If you would invest  18.00  in Clover Leaf Capital on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Clover Leaf Capital or generate 0.0% return on investment over 90 days.

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

GSR II Meteora  vs.  Clover Leaf Capital

GSR II Meteora

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GSR II Meteora has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, GSR II is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Clover Leaf Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clover Leaf Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Clover Leaf is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GSR II and Clover Leaf

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

The idea behind GSR II Meteora and Clover Leaf Capital 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.