Correlation Between Screaming Eagle and Gores Holdings

Can any of the company-specific risk be diversified away by investing in both Screaming Eagle and Gores Holdings 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 Screaming Eagle and Gores Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Screaming Eagle Acquisition and Gores Holdings IX, you can compare the effects of market volatilities on Screaming Eagle and Gores Holdings 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 Screaming Eagle with a short position of Gores Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Screaming Eagle and Gores Holdings.

Diversification Opportunities for Screaming Eagle and Gores Holdings

-0.54

Correlation Coefficient

Screaming Eagle  Gores Holdings

Excellent diversification

The 3 months correlation between Screaming and Gores is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Screaming Eagle Acquisition and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX and Screaming Eagle 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 Screaming Eagle Acquisition are associated (or correlated) with Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of Screaming Eagle i.e., Screaming Eagle and Gores Holdings go up and down completely randomly.

Pair Corralation between Screaming Eagle and Gores Holdings

If you would invest  8.08  in Gores Holdings IX on September 16, 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 Against
Strength	Very Weak
Accuracy	4.0%
Values	Daily Returns

Screaming Eagle Acquisition  vs.  Gores Holdings IX

Screaming Eagle Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Screaming Eagle Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Screaming Eagle is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Screaming Eagle and Gores Holdings

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

The idea behind Screaming Eagle Acquisition and Gores Holdings IX 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.