Correlation Between PowerUp Acquisition and GigCapital7 Corp

Can any of the company-specific risk be diversified away by investing in both PowerUp Acquisition and GigCapital7 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 PowerUp Acquisition and GigCapital7 Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PowerUp Acquisition Corp and GigCapital7 Corp Class, you can compare the effects of market volatilities on PowerUp Acquisition and GigCapital7 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 PowerUp Acquisition with a short position of GigCapital7 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and GigCapital7 Corp.

Diversification Opportunities for PowerUp Acquisition and GigCapital7 Corp

-0.43

Correlation Coefficient

PowerUp Acquisition  GigCapital7 Corp

Very good diversification

The 3 months correlation between PowerUp and GigCapital7 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and GigCapital7 Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigCapital7 Corp Class and PowerUp Acquisition 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 PowerUp Acquisition Corp are associated (or correlated) with GigCapital7 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigCapital7 Corp Class has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and GigCapital7 Corp go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and GigCapital7 Corp

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 30.64 times more return on investment than GigCapital7 Corp. However, PowerUp Acquisition is 30.64 times more volatile than GigCapital7 Corp Class. It trades about 0.24 of its potential returns per unit of risk. GigCapital7 Corp Class is currently generating about 0.01 per unit of risk. If you would invest  1.95  in PowerUp Acquisition Corp on September 28, 2024 and sell it today you would earn a total of  1.04  from holding PowerUp Acquisition Corp or generate 53.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.0%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  GigCapital7 Corp Class

PowerUp Acquisition Corp

Risk-Adjusted Performance

2 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, PowerUp Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

GigCapital7 Corp Class

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GigCapital7 Corp Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, GigCapital7 Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PowerUp Acquisition and GigCapital7 Corp

The main advantage of trading using opposite PowerUp Acquisition and GigCapital7 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerUp Acquisition position performs unexpectedly, GigCapital7 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 GigCapital7 Corp will offset losses from the drop in GigCapital7 Corp's long position.

The idea behind PowerUp Acquisition Corp and GigCapital7 Corp Class 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.