Correlation Between Associated Capital and ClimateRock
Can any of the company-specific risk be diversified away by investing in both Associated Capital and ClimateRock 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 Associated Capital and ClimateRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and ClimateRock Class A, you can compare the effects of market volatilities on Associated Capital and ClimateRock 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 Associated Capital with a short position of ClimateRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and ClimateRock.
Diversification Opportunities for Associated Capital and ClimateRock
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and ClimateRock is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and ClimateRock Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Class and Associated Capital 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 Associated Capital Group are associated (or correlated) with ClimateRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClimateRock Class has no effect on the direction of Associated Capital i.e., Associated Capital and ClimateRock go up and down completely randomly.
Pair Corralation between Associated Capital and ClimateRock
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 5.38 times more return on investment than ClimateRock. However, Associated Capital is 5.38 times more volatile than ClimateRock Class A. It trades about 0.13 of its potential returns per unit of risk. ClimateRock Class A is currently generating about 0.13 per unit of risk. If you would invest 3,532 in Associated Capital Group on November 5, 2024 and sell it today you would earn a total of 125.00 from holding Associated Capital Group or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. ClimateRock Class A
Performance |
| Timeline |
| Associated Capital |
| ClimateRock Class |
Associated Capital and ClimateRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and ClimateRock
The main advantage of trading using opposite Associated Capital and ClimateRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, ClimateRock 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 ClimateRock will offset losses from the drop in ClimateRock's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| ClimateRock vs. AlphaVest Acquisition Corp | ClimateRock vs. Golden Star Acquisition | ClimateRock vs. Alpha One | ClimateRock vs. Manaris Corp |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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