Correlation Between Greenland Acquisition and Graco

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

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

Diversification Opportunities for Greenland Acquisition and Graco

0.08

Correlation Coefficient

Greenland Acquisition  Graco

Significant diversification

The 3 months correlation between Greenland and Graco is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Acquisition Corp and Graco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graco Inc and Greenland 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 Greenland Acquisition Corp are associated (or correlated) with Graco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graco Inc has no effect on the direction of Greenland Acquisition i.e., Greenland Acquisition and Graco go up and down completely randomly.

Pair Corralation between Greenland Acquisition and Graco

Given the investment horizon of 90 days Greenland Acquisition Corp is expected to generate 8.74 times more return on investment than Graco. However, Greenland Acquisition is 8.74 times more volatile than Graco Inc. It trades about 0.03 of its potential returns per unit of risk. Graco Inc is currently generating about 0.0 per unit of risk. If you would invest  193.00  in Greenland Acquisition Corp on December 29, 2024 and sell it today you would lose (20.00) from holding Greenland Acquisition Corp or give up 10.36% of portfolio value over 90 days.

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

Greenland Acquisition Corp  vs.  Graco Inc

Greenland Acquisition

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenland Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Greenland Acquisition exhibited solid returns over the last few months and may actually be approaching a breakup point.

Graco Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graco Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Graco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Greenland Acquisition and Graco

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

The idea behind Greenland Acquisition Corp and Graco 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.