Correlation Between Launch One and GP Act

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

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

Diversification Opportunities for Launch One and GP Act

0.79

Correlation Coefficient

Launch One  GP Act

Poor diversification

The 3 months correlation between Launch and GPAT is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Launch One Acquisition and GP Act III Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Act III and Launch One 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 Launch One Acquisition are associated (or correlated) with GP Act. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Act III has no effect on the direction of Launch One i.e., Launch One and GP Act go up and down completely randomly.

Pair Corralation between Launch One and GP Act

Given the investment horizon of 90 days Launch One is expected to generate 2.35 times less return on investment than GP Act. But when comparing it to its historical volatility, Launch One Acquisition is 1.28 times less risky than GP Act. It trades about 0.06 of its potential returns per unit of risk. GP Act III Acquisition is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,053  in GP Act III Acquisition on August 16, 2025 and sell it today you would earn a total of  12.00  from holding GP Act III Acquisition or generate 1.14% return on investment over 90 days.

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

Launch One Acquisition  vs.  GP Act III Acquisition

Launch One Acquisition

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Launch One Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Launch One is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GP Act III

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in GP Act III Acquisition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GP Act is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Launch One and GP Act

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

The idea behind Launch One Acquisition and GP Act III Acquisition 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..