Correlation Between ESGEN Acquisition and Coty
Can any of the company-specific risk be diversified away by investing in both ESGEN Acquisition and Coty 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 Coty 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 Coty Inc, you can compare the effects of market volatilities on ESGEN Acquisition and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESGEN Acquisition and Coty.
Diversification Opportunities for ESGEN Acquisition and Coty
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ESGEN and Coty is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding ESGEN Acquisition Corp and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of ESGEN Acquisition i.e., ESGEN Acquisition and Coty go up and down completely randomly.
Pair Corralation between ESGEN Acquisition and Coty
If you would invest 1,101 in ESGEN Acquisition Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding ESGEN Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.8% |
| Values | Daily Returns |
ESGEN Acquisition Corp vs. Coty Inc
Performance |
| Timeline |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Coty Inc |
ESGEN Acquisition and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESGEN Acquisition and Coty
The main advantage of trading using opposite ESGEN Acquisition and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESGEN Acquisition position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| ESGEN Acquisition vs. JD Sports Fashion | ESGEN Acquisition vs. Brunswick | ESGEN Acquisition vs. Academy Sports Outdoors | ESGEN Acquisition vs. AerSale Corp |
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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