Correlation Between Accretion Acquisition and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both Accretion Acquisition 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 Accretion Acquisition and ESGEN Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accretion Acquisition Corp and ESGEN Acquisition Corp, you can compare the effects of market volatilities on Accretion Acquisition 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 Accretion Acquisition with a short position of ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accretion Acquisition and ESGEN Acquisition.
Diversification Opportunities for Accretion Acquisition and ESGEN Acquisition
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Accretion and ESGEN is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Accretion Acquisition Corp 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 Accretion 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 Accretion Acquisition Corp 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 Accretion Acquisition i.e., Accretion Acquisition and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between Accretion Acquisition and ESGEN Acquisition
Assuming the 90 days horizon Accretion Acquisition is expected to generate 2.61 times less return on investment than ESGEN Acquisition. But when comparing it to its historical volatility, Accretion Acquisition Corp is 2.75 times less risky than ESGEN Acquisition. It trades about 0.19 of its potential returns per unit of risk. ESGEN Acquisition Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,086 in ESGEN Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 15.00 from holding ESGEN Acquisition Corp or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.0% |
| Values | Daily Returns |
Accretion Acquisition Corp vs. ESGEN Acquisition Corp
Performance |
| Timeline |
| Accretion Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Accretion Acquisition and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accretion Acquisition and ESGEN Acquisition
The main advantage of trading using opposite Accretion Acquisition and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accretion Acquisition 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.| Accretion Acquisition vs. Tenaris SA ADR | Accretion Acquisition vs. Albertsons Companies | Accretion Acquisition vs. Nabors Industries | Accretion Acquisition vs. Grocery Outlet Holding |
| ESGEN Acquisition vs. Stepan Company | ESGEN Acquisition vs. Cardinal Health | ESGEN Acquisition vs. Xtant Medical Holdings | ESGEN Acquisition vs. Aquestive Therapeutics |
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 Stocks Directory module to find actively traded stocks across global markets.
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