Correlation Between Clean Earth and ClimateRock Right

Can any of the company-specific risk be diversified away by investing in both Clean Earth and ClimateRock Right 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 Clean Earth and ClimateRock Right into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clean Earth Acquisitions and ClimateRock Right, you can compare the effects of market volatilities on Clean Earth and ClimateRock Right 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 Clean Earth with a short position of ClimateRock Right. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Earth and ClimateRock Right.

Diversification Opportunities for Clean Earth and ClimateRock Right

0.49

Correlation Coefficient

Clean Earth  ClimateRock Right

Very weak diversification

The 3 months correlation between Clean and ClimateRock is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Clean Earth Acquisitions and ClimateRock Right in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Right and Clean Earth 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 Clean Earth Acquisitions are associated (or correlated) with ClimateRock Right. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClimateRock Right has no effect on the direction of Clean Earth i.e., Clean Earth and ClimateRock Right go up and down completely randomly.

Pair Corralation between Clean Earth and ClimateRock Right

If you would invest  6.00  in ClimateRock Right on October 11, 2024 and sell it today you would earn a total of  4.00  from holding ClimateRock Right or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	14.29%
Values	Daily Returns

Clean Earth Acquisitions  vs.  ClimateRock Right

Clean Earth Acquisitions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Earth Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Clean Earth is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ClimateRock Right

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days ClimateRock Right has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak fundamental indicators, ClimateRock Right reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Earth and ClimateRock Right

The main advantage of trading using opposite Clean Earth and ClimateRock Right positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Earth position performs unexpectedly, ClimateRock Right 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 Right will offset losses from the drop in ClimateRock Right's long position.

The idea behind Clean Earth Acquisitions and ClimateRock Right 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.