Correlation Between ClimateRock and Inflection Point
Can any of the company-specific risk be diversified away by investing in both ClimateRock and Inflection Point 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 ClimateRock and Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClimateRock Class A and Inflection Point Acquisition, you can compare the effects of market volatilities on ClimateRock and Inflection Point 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 ClimateRock with a short position of Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClimateRock and Inflection Point.
Diversification Opportunities for ClimateRock and Inflection Point
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ClimateRock and Inflection is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ClimateRock Class A and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and ClimateRock 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 ClimateRock Class A are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of ClimateRock i.e., ClimateRock and Inflection Point go up and down completely randomly.
Pair Corralation between ClimateRock and Inflection Point
Given the investment horizon of 90 days ClimateRock Class A is expected to generate 0.83 times more return on investment than Inflection Point. However, ClimateRock Class A is 1.2 times less risky than Inflection Point. It trades about 0.07 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.06 per unit of risk. If you would invest 1,060 in ClimateRock Class A on September 2, 2024 and sell it today you would earn a total of 105.00 from holding ClimateRock Class A or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ClimateRock Class A vs. Inflection Point Acquisition
Performance |
| Timeline |
| ClimateRock Class |
| Inflection Point Acq |
ClimateRock and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClimateRock and Inflection Point
The main advantage of trading using opposite ClimateRock and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClimateRock position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| ClimateRock vs. AlphaVest Acquisition Corp | ClimateRock vs. Golden Star Acquisition | ClimateRock vs. Alpha One | ClimateRock vs. Manaris Corp |
| Inflection Point vs. Kinsale Capital Group | Inflection Point vs. GoHealth | Inflection Point vs. Stratasys | Inflection Point vs. NI Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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