Correlation Between Cartesian Growth and Gores Holdings

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

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

Diversification Opportunities for Cartesian Growth and Gores Holdings

-0.98

Correlation Coefficient

Cartesian Growth  Gores Holdings

Pay attention - limited upside

The 3 months correlation between Cartesian and Gores is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding Cartesian Growth and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX and Cartesian Growth 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 Cartesian Growth are associated (or correlated) with Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of Cartesian Growth i.e., Cartesian Growth and Gores Holdings go up and down completely randomly.

Pair Corralation between Cartesian Growth and Gores Holdings

Assuming the 90 days horizon Cartesian Growth is expected to generate 0.71 times more return on investment than Gores Holdings. However, Cartesian Growth is 1.41 times less risky than Gores Holdings. It trades about 0.12 of its potential returns per unit of risk. Gores Holdings IX is currently generating about -0.17 per unit of risk. If you would invest  1,138  in Cartesian Growth on September 17, 2024 and sell it today you would earn a total of  25.00  from holding Cartesian Growth or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	90.77%
Values	Daily Returns

Cartesian Growth  vs.  Gores Holdings IX

Cartesian Growth

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cartesian Growth are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Cartesian Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Gores Holdings IX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gores Holdings IX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Gores Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cartesian Growth and Gores Holdings

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

The idea behind Cartesian Growth and Gores Holdings IX 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.