Correlation Between ESGEN Acquisition and Better World
Can any of the company-specific risk be diversified away by investing in both ESGEN Acquisition and Better World 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 ESGEN Acquisition and Better World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESGEN Acquisition Corp and Better World Acquisition, you can compare the effects of market volatilities on ESGEN Acquisition and Better World 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 ESGEN Acquisition with a short position of Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESGEN Acquisition and Better World.
Diversification Opportunities for ESGEN Acquisition and Better World
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ESGEN and Better is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ESGEN Acquisition Corp and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Acquisition and ESGEN 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 ESGEN Acquisition Corp are associated (or correlated) with Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of ESGEN Acquisition i.e., ESGEN Acquisition and Better World go up and down completely randomly.
Pair Corralation between ESGEN Acquisition and Better World
If you would invest 1,091 in Better World Acquisition on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Better World Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESGEN Acquisition Corp vs. Better World Acquisition
Performance |
| Timeline |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ESGEN Acquisition and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESGEN Acquisition and Better World
The main advantage of trading using opposite ESGEN Acquisition and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESGEN Acquisition position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| ESGEN Acquisition vs. Insight Acquisition Corp | ESGEN Acquisition vs. ClimateRock Class A | ESGEN Acquisition vs. Nova Vision Acquisition | ESGEN Acquisition vs. PowerUp Acquisition Corp |
| Better World vs. Insight Acquisition Corp | Better World vs. ClimateRock Class A | Better World vs. Oak Woods Acquisition |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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