Correlation Between Gores Holdings and Cartesian Growth

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

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

Diversification Opportunities for Gores Holdings and Cartesian Growth

-0.98

Correlation Coefficient

Gores Holdings  Cartesian Growth

Pay attention - limited upside

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

Pair Corralation between Gores Holdings and Cartesian Growth

Given the investment horizon of 90 days Gores Holdings IX is expected to under-perform the Cartesian Growth. In addition to that, Gores Holdings is 1.52 times more volatile than Cartesian Growth. It trades about -0.31 of its total potential returns per unit of risk. Cartesian Growth is currently generating about 0.22 per unit of volatility. 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	75.0%
Values	Daily Returns

Gores Holdings IX  vs.  Cartesian Growth

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.

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.

Pair Trading with Gores Holdings and Cartesian Growth

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

The idea behind Gores Holdings IX and Cartesian Growth 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.