Correlation Between Coty and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both Coty and ESGEN Acquisition 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 Coty and ESGEN Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and ESGEN Acquisition Corp, you can compare the effects of market volatilities on Coty and ESGEN Acquisition 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 Coty with a short position of ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and ESGEN Acquisition.
Diversification Opportunities for Coty and ESGEN Acquisition
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coty and ESGEN is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and ESGEN Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGEN Acquisition Corp and Coty 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 Coty Inc are associated (or correlated) with ESGEN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGEN Acquisition Corp has no effect on the direction of Coty i.e., Coty and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between Coty and ESGEN Acquisition
If you would invest 736.00 in Coty Inc on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Coty Inc or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Coty Inc vs. ESGEN Acquisition Corp
Performance |
| Timeline |
| Coty Inc |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coty and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and ESGEN Acquisition
The main advantage of trading using opposite Coty and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, ESGEN Acquisition 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 ESGEN Acquisition will offset losses from the drop in ESGEN Acquisition's long position.| Coty vs. Victory Integrity Smallmid Cap | Coty vs. Hilton Worldwide Holdings | Coty vs. NVIDIA | Coty vs. JPMorgan Chase Co |
| ESGEN Acquisition vs. Coty Inc | ESGEN Acquisition vs. Sun Country Airlines | ESGEN Acquisition vs. LENSAR Inc | ESGEN Acquisition vs. JD Sports Fashion |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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