Correlation Between Target Global and GIACONDA FPO

Can any of the company-specific risk be diversified away by investing in both Target Global and GIACONDA FPO 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 Target Global and GIACONDA FPO into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Target Global and GIACONDA FPO

0.48

Correlation Coefficient

Target Global  GIACONDA FPO

Very weak diversification

The 3 months correlation between Target and GIACONDA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Target Global Acquisition and GIACONDA FPO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIACONDA FPO and Target Global 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 Target Global Acquisition are associated (or correlated) with GIACONDA FPO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIACONDA FPO has no effect on the direction of Target Global i.e., Target Global and GIACONDA FPO go up and down completely randomly.

Pair Corralation between Target Global and GIACONDA FPO

If you would invest  1,133  in Target Global Acquisition on September 16, 2024 and sell it today you would earn a total of  3.00  from holding Target Global Acquisition or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Target Global Acquisition  vs.  GIACONDA FPO

Target Global Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Target Global Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Target Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

GIACONDA FPO

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Target Global and GIACONDA FPO

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

The idea behind Target Global Acquisition and GIACONDA FPO 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..