Correlation Between Clean Earth and Kairous Acquisition

Can any of the company-specific risk be diversified away by investing in both Clean Earth and Kairous 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 Clean Earth and Kairous Acquisition 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 Kairous Acquisition Corp, you can compare the effects of market volatilities on Clean Earth and Kairous 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 Clean Earth with a short position of Kairous Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Earth and Kairous Acquisition.

Diversification Opportunities for Clean Earth and Kairous Acquisition

-0.25

Correlation Coefficient

Clean Earth  Kairous Acquisition

Very good diversification

The 3 months correlation between Clean and Kairous is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Clean Earth Acquisitions and Kairous Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kairous Acquisition Corp 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 Kairous Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kairous Acquisition Corp has no effect on the direction of Clean Earth i.e., Clean Earth and Kairous Acquisition go up and down completely randomly.

Pair Corralation between Clean Earth and Kairous Acquisition

If you would invest  7.01  in Kairous Acquisition Corp on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Kairous Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clean Earth Acquisitions  vs.  Kairous Acquisition Corp

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.

Kairous Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kairous Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Clean Earth and Kairous Acquisition

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

The idea behind Clean Earth Acquisitions and Kairous 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.