Correlation Between Plum Acquisition and Gap,

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

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

Diversification Opportunities for Plum Acquisition and Gap,

0.32

Correlation Coefficient

Plum Acquisition  Gap,

Weak diversification

The 3 months correlation between Plum and Gap, is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Plum Acquisition Corp and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Plum 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 Plum Acquisition Corp are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Plum Acquisition i.e., Plum Acquisition and Gap, go up and down completely randomly.

Pair Corralation between Plum Acquisition and Gap,

Assuming the 90 days horizon Plum Acquisition Corp is expected to generate 27.45 times more return on investment than Gap,. However, Plum Acquisition is 27.45 times more volatile than The Gap,. It trades about 0.13 of its potential returns per unit of risk. The Gap, is currently generating about 0.04 per unit of risk. If you would invest  0.05  in Plum Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  19.95  from holding Plum Acquisition Corp or generate 39900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.2%
Values	Daily Returns

Plum Acquisition Corp  vs.  The Gap,

Plum Acquisition Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Plum Acquisition Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking indicators, Plum Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Gap,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plum Acquisition and Gap,

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

The idea behind Plum Acquisition Corp and The Gap, 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.