Correlation Between FTAC Emerald and Verde Clean
Can any of the company-specific risk be diversified away by investing in both FTAC Emerald and Verde Clean 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 FTAC Emerald and Verde Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAC Emerald Acquisition and Verde Clean Fuels, you can compare the effects of market volatilities on FTAC Emerald and Verde Clean 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 FTAC Emerald with a short position of Verde Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAC Emerald and Verde Clean.
Diversification Opportunities for FTAC Emerald and Verde Clean
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FTAC and Verde is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding FTAC Emerald Acquisition and Verde Clean Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verde Clean Fuels and FTAC Emerald 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 FTAC Emerald Acquisition are associated (or correlated) with Verde Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verde Clean Fuels has no effect on the direction of FTAC Emerald i.e., FTAC Emerald and Verde Clean go up and down completely randomly.
Pair Corralation between FTAC Emerald and Verde Clean
Considering the 90-day investment horizon FTAC Emerald Acquisition is expected to generate 0.3 times more return on investment than Verde Clean. However, FTAC Emerald Acquisition is 3.31 times less risky than Verde Clean. It trades about 0.17 of its potential returns per unit of risk. Verde Clean Fuels is currently generating about 0.03 per unit of risk. If you would invest 1,088 in FTAC Emerald Acquisition on September 3, 2024 and sell it today you would earn a total of 29.00 from holding FTAC Emerald Acquisition or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAC Emerald Acquisition vs. Verde Clean Fuels
Performance |
| Timeline |
| FTAC Emerald Acquisition |
| Verde Clean Fuels |
FTAC Emerald and Verde Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAC Emerald and Verde Clean
The main advantage of trading using opposite FTAC Emerald and Verde Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAC Emerald position performs unexpectedly, Verde Clean 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 Verde Clean will offset losses from the drop in Verde Clean's long position.| FTAC Emerald vs. Verde Clean Fuels | FTAC Emerald vs. Summit Materials | FTAC Emerald vs. Ainsworth Game Technology | FTAC Emerald vs. Evolution Gaming Group |
| Verde Clean vs. Brenmiller Energy Ltd | Verde Clean vs. Fusion Fuel Green | Verde Clean vs. Enlight Renewable Energy | Verde Clean vs. SCOR PK |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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