Correlation Between Khosla Ventures and Motive Capital

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

By analyzing existing cross correlation between Khosla Ventures Acquisition and Motive Capital Corp, you can compare the effects of market volatilities on Khosla Ventures and Motive 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 Khosla Ventures with a short position of Motive Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khosla Ventures and Motive Capital.

Diversification Opportunities for Khosla Ventures and Motive Capital

0.8

Correlation Coefficient

Khosla Ventures  Motive Capital

Very poor diversification

The 3 months correlation between Khosla and Motive is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Khosla Ventures Acquisition and Motive Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motive Capital Corp and Khosla Ventures 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 Khosla Ventures Acquisition are associated (or correlated) with Motive Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motive Capital Corp has no effect on the direction of Khosla Ventures i.e., Khosla Ventures and Motive Capital go up and down completely randomly.

Pair Corralation between Khosla Ventures and Motive Capital

If you would invest  1,051  in Motive Capital Corp on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Motive Capital Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Khosla Ventures Acquisition  vs.  Motive Capital Corp

Khosla Ventures Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Khosla Ventures Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Khosla Ventures is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Motive Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Motive Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Motive Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Khosla Ventures and Motive Capital

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

The idea behind Khosla Ventures Acquisition and Motive Capital 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.