Correlation Between Gores Holdings and Sustainable Development

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

Diversification Opportunities for Gores Holdings and Sustainable Development

0.65

Correlation Coefficient

Gores Holdings  Sustainable Development

Poor diversification

The 3 months correlation between Gores and Sustainable is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Sustainable Development Acquis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sustainable Development 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 Sustainable Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sustainable Development has no effect on the direction of Gores Holdings i.e., Gores Holdings and Sustainable Development go up and down completely randomly.

Pair Corralation between Gores Holdings and Sustainable Development

If you would invest  8.08  in Gores Holdings IX on September 15, 2024 and sell it today you would lose (7.58) from holding Gores Holdings IX or give up 93.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.0%
Values	Daily Returns

Gores Holdings IX  vs.  Sustainable Development Acquis

Gores Holdings IX

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gores Holdings IX are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gores Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Sustainable Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sustainable Development Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Sustainable Development is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Gores Holdings and Sustainable Development

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

The idea behind Gores Holdings IX and Sustainable Development 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 CEOs Directory module to screen CEOs from public companies around the world.