Correlation Between ClimateRock Right and Yotta Acquisition

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

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

Diversification Opportunities for ClimateRock Right and Yotta Acquisition

-0.19

Correlation Coefficient

ClimateRock Right  Yotta Acquisition

Good diversification

The 3 months correlation between ClimateRock and Yotta is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ClimateRock Right and Yotta Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition and ClimateRock Right 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 ClimateRock Right are associated (or correlated) with Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition has no effect on the direction of ClimateRock Right i.e., ClimateRock Right and Yotta Acquisition go up and down completely randomly.

Pair Corralation between ClimateRock Right and Yotta Acquisition

Assuming the 90 days horizon ClimateRock Right is expected to generate 1.81 times more return on investment than Yotta Acquisition. However, ClimateRock Right is 1.81 times more volatile than Yotta Acquisition. It trades about 0.49 of its potential returns per unit of risk. Yotta Acquisition is currently generating about -0.64 per unit of risk. If you would invest  6.94  in ClimateRock Right on October 27, 2024 and sell it today you would earn a total of  4.06  from holding ClimateRock Right or generate 58.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

ClimateRock Right  vs.  Yotta Acquisition

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.

Yotta Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yotta Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic 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 ClimateRock Right and Yotta Acquisition

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

The idea behind ClimateRock Right and Yotta Acquisition 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.