Correlation Between Gores Holdings and Flag Ship

Can any of the company-specific risk be diversified away by investing in both Gores Holdings and Flag Ship 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 Flag Ship 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 Flag Ship Acquisition, you can compare the effects of market volatilities on Gores Holdings and Flag Ship 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 Flag Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gores Holdings and Flag Ship.

Diversification Opportunities for Gores Holdings and Flag Ship

-0.71

Correlation Coefficient

Gores Holdings  Flag Ship

Pay attention - limited upside

The 3 months correlation between Gores and Flag is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Flag Ship Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flag Ship Acquisition 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 Flag Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flag Ship Acquisition has no effect on the direction of Gores Holdings i.e., Gores Holdings and Flag Ship go up and down completely randomly.

Pair Corralation between Gores Holdings and Flag Ship

Assuming the 90 days horizon Gores Holdings IX is expected to generate 103.33 times more return on investment than Flag Ship. However, Gores Holdings is 103.33 times more volatile than Flag Ship Acquisition. It trades about 0.12 of its potential returns per unit of risk. Flag Ship Acquisition is currently generating about 0.09 per unit of risk. If you would invest  7.50  in Gores Holdings IX on September 22, 2024 and sell it today you would lose (7.00) from holding Gores Holdings IX or give up 93.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	35.94%
Values	Daily Returns

Gores Holdings IX  vs.  Flag Ship Acquisition

Gores Holdings IX

Risk-Adjusted Performance

0 of 100

OK

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 weak basic indicators, Gores Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Flag Ship Acquisition

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flag Ship Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Flag Ship 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 Flag Ship

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

The idea behind Gores Holdings IX and Flag Ship Acquisition 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.