Correlation Between ESGEN Acquisition and Omnilit Acquisition
Can any of the company-specific risk be diversified away by investing in both ESGEN Acquisition and Omnilit 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 ESGEN Acquisition and Omnilit Acquisition 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 Omnilit Acquisition Corp, you can compare the effects of market volatilities on ESGEN Acquisition and Omnilit 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 ESGEN Acquisition with a short position of Omnilit Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESGEN Acquisition and Omnilit Acquisition.
Diversification Opportunities for ESGEN Acquisition and Omnilit Acquisition
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ESGEN and Omnilit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ESGEN Acquisition Corp and Omnilit Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnilit Acquisition Corp 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 Omnilit Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnilit Acquisition Corp has no effect on the direction of ESGEN Acquisition i.e., ESGEN Acquisition and Omnilit Acquisition go up and down completely randomly.
Pair Corralation between ESGEN Acquisition and Omnilit Acquisition
Given the investment horizon of 90 days ESGEN Acquisition Corp is expected to generate 0.33 times more return on investment than Omnilit Acquisition. However, ESGEN Acquisition Corp is 3.07 times less risky than Omnilit Acquisition. It trades about 0.14 of its potential returns per unit of risk. Omnilit Acquisition Corp is currently generating about 0.02 per unit of risk. If you would invest 1,027 in ESGEN Acquisition Corp on August 25, 2024 and sell it today you would earn a total of 68.00 from holding ESGEN Acquisition Corp or generate 6.62% 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. Omnilit Acquisition Corp
Performance |
| Timeline |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Omnilit Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ESGEN Acquisition and Omnilit Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESGEN Acquisition and Omnilit Acquisition
The main advantage of trading using opposite ESGEN Acquisition and Omnilit Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESGEN Acquisition position performs unexpectedly, Omnilit 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 Omnilit Acquisition will offset losses from the drop in Omnilit Acquisition'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 |
| Omnilit Acquisition vs. DP Cap Acquisition | Omnilit Acquisition vs. Oak Woods Acquisition | Omnilit Acquisition vs. Insight Acquisition Corp | Omnilit Acquisition vs. ClimateRock Class A |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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