Correlation Between Treasure Global and Pono Capital

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

By analyzing existing cross correlation between Treasure Global and Pono Capital Two, you can compare the effects of market volatilities on Treasure Global and Pono Capital 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 Treasure Global with a short position of Pono Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasure Global and Pono Capital.

Diversification Opportunities for Treasure Global and Pono Capital

0.35

Correlation Coefficient

Treasure Global  Pono Capital

Weak diversification

The 3 months correlation between Treasure and Pono is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Treasure Global and Pono Capital Two in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pono Capital Two and Treasure Global 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 Treasure Global are associated (or correlated) with Pono Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pono Capital Two has no effect on the direction of Treasure Global i.e., Treasure Global and Pono Capital go up and down completely randomly.

Pair Corralation between Treasure Global and Pono Capital

Considering the 90-day investment horizon Treasure Global is expected to under-perform the Pono Capital. In addition to that, Treasure Global is 1.42 times more volatile than Pono Capital Two. It trades about -0.07 of its total potential returns per unit of risk. Pono Capital Two is currently generating about 0.12 per unit of volatility. If you would invest  1,120  in Pono Capital Two on September 5, 2024 and sell it today you would earn a total of  80.00  from holding Pono Capital Two or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	15.63%
Values	Daily Returns

Treasure Global  vs.  Pono Capital Two

Treasure Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Treasure Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pono Capital Two

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Pono Capital Two has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, Pono Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Treasure Global and Pono Capital

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

The idea behind Treasure Global and Pono Capital Two 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.