Correlation Between Pool and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both Pool 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 Pool and ESGEN Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pool Corporation and ESGEN Acquisition Corp, you can compare the effects of market volatilities on Pool 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 Pool with a short position of ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and ESGEN Acquisition.
Diversification Opportunities for Pool and ESGEN Acquisition
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pool and ESGEN is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pool 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 Pool 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 Pool Corporation 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 Pool i.e., Pool and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between Pool and ESGEN Acquisition
If you would invest 34,784 in Pool Corporation on October 22, 2024 and sell it today you would earn a total of 242.00 from holding Pool Corporation or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Pool Corp. vs. ESGEN Acquisition Corp
Performance |
| Timeline |
| Pool |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pool and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and ESGEN Acquisition
The main advantage of trading using opposite Pool and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool 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 Pool Corporation 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. Rocky Brands | ESGEN Acquisition vs. Spectrum Brands Holdings | ESGEN Acquisition vs. International Consolidated Airlines | ESGEN Acquisition vs. RBC Bearings Incorporated |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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