Correlation Between Waldencast Acquisition and GainClients

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

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

Diversification Opportunities for Waldencast Acquisition and GainClients

0.0

Correlation Coefficient

Waldencast Acquisition  GainClients

Pay attention - limited upside

The 3 months correlation between Waldencast and GainClients is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and GainClients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GainClients and Waldencast 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 Waldencast Acquisition Corp are associated (or correlated) with GainClients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GainClients has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and GainClients go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and GainClients

Given the investment horizon of 90 days Waldencast Acquisition Corp is expected to under-perform the GainClients. But the stock apears to be less risky and, when comparing its historical volatility, Waldencast Acquisition Corp is 14.09 times less risky than GainClients. The stock trades about -0.06 of its potential returns per unit of risk. The GainClients is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.26  in GainClients on September 23, 2024 and sell it today you would lose (0.25) from holding GainClients or give up 96.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Waldencast Acquisition Corp  vs.  GainClients

Waldencast Acquisition

Risk-Adjusted Performance

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Very Weak

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

GainClients

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GainClients has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, GainClients is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Waldencast Acquisition and GainClients

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

The idea behind Waldencast Acquisition Corp and GainClients 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 Commodity Directory module to find actively traded commodities issued by global exchanges.