Correlation Between LAVA Medtech and ClimateRock
Can any of the company-specific risk be diversified away by investing in both LAVA Medtech and ClimateRock 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 LAVA Medtech and ClimateRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAVA Medtech Acquisition and ClimateRock Class A, you can compare the effects of market volatilities on LAVA Medtech and ClimateRock 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 LAVA Medtech with a short position of ClimateRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAVA Medtech and ClimateRock.
Diversification Opportunities for LAVA Medtech and ClimateRock
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAVA and ClimateRock is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LAVA Medtech Acquisition and ClimateRock Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Class and LAVA Medtech 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 LAVA Medtech Acquisition are associated (or correlated) with ClimateRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClimateRock Class has no effect on the direction of LAVA Medtech i.e., LAVA Medtech and ClimateRock go up and down completely randomly.
Pair Corralation between LAVA Medtech and ClimateRock
If you would invest 1,160 in ClimateRock Class A on August 29, 2024 and sell it today you would earn a total of 5.00 from holding ClimateRock Class A or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
LAVA Medtech Acquisition vs. ClimateRock Class A
Performance |
| Timeline |
| LAVA Medtech Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ClimateRock Class |
LAVA Medtech and ClimateRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAVA Medtech and ClimateRock
The main advantage of trading using opposite LAVA Medtech and ClimateRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAVA Medtech position performs unexpectedly, ClimateRock 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 ClimateRock will offset losses from the drop in ClimateRock's long position.The idea behind LAVA Medtech Acquisition and ClimateRock Class A 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.| ClimateRock vs. Patria Latin American | ClimateRock vs. ABIVAX Socit Anonyme | ClimateRock vs. Pinnacle Sherman Multi Strategy | ClimateRock vs. Morningstar Unconstrained Allocation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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