Correlation Between Gores Holdings and Slam Corp

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

Diversification Opportunities for Gores Holdings and Slam Corp

0.01

Correlation Coefficient

Gores Holdings  Slam Corp

Significant diversification

The 3 months correlation between Gores and Slam is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gores Holdings IX and Slam Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slam Corp 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 Slam Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slam Corp has no effect on the direction of Gores Holdings i.e., Gores Holdings and Slam Corp go up and down completely randomly.

Pair Corralation between Gores Holdings and Slam Corp

If you would invest  4.65  in Gores Holdings IX on September 15, 2024 and sell it today you would lose (4.15) from holding Gores Holdings IX or give up 89.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	7.69%
Values	Daily Returns

Gores Holdings IX  vs.  Slam Corp

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.

Slam Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slam Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Slam Corp 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 Slam Corp

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

The idea behind Gores Holdings IX and Slam Corp 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.