Correlation Between Kingswood Acquisition and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both Kingswood 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 Kingswood 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 Kingswood Acquisition Corp and ESGEN Acquisition Corp, you can compare the effects of market volatilities on Kingswood 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 Kingswood Acquisition with a short position of ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingswood Acquisition and ESGEN Acquisition.
Diversification Opportunities for Kingswood Acquisition and ESGEN Acquisition
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingswood and ESGEN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kingswood 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 Kingswood 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 Kingswood 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 Kingswood Acquisition i.e., Kingswood Acquisition and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between Kingswood Acquisition and ESGEN Acquisition
If you would invest 1,095 in ESGEN Acquisition Corp on August 29, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingswood Acquisition Corp vs. ESGEN Acquisition Corp
Performance |
| Timeline |
| Kingswood Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kingswood Acquisition and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingswood Acquisition and ESGEN Acquisition
The main advantage of trading using opposite Kingswood Acquisition and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingswood 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.The idea behind Kingswood Acquisition Corp and ESGEN Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ESGEN Acquisition vs. Insight Acquisition Corp | ESGEN Acquisition vs. ClimateRock Class A | ESGEN Acquisition vs. Nova Vision Acquisition | ESGEN Acquisition vs. PowerUp Acquisition 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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