Correlation Between CVW CleanTech and Accretion Acquisition

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

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

Diversification Opportunities for CVW CleanTech and Accretion Acquisition

-0.5

Correlation Coefficient

CVW CleanTech  Accretion Acquisition

Very good diversification

The 3 months correlation between CVW and Accretion is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Accretion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accretion Acquisition and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with Accretion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accretion Acquisition has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Accretion Acquisition go up and down completely randomly.

Pair Corralation between CVW CleanTech and Accretion Acquisition

Assuming the 90 days horizon CVW CleanTech is expected to generate 35.41 times more return on investment than Accretion Acquisition. However, CVW CleanTech is 35.41 times more volatile than Accretion Acquisition Corp. It trades about 0.03 of its potential returns per unit of risk. Accretion Acquisition Corp is currently generating about 0.12 per unit of risk. If you would invest  86.00  in CVW CleanTech on September 26, 2024 and sell it today you would lose (21.00) from holding CVW CleanTech or give up 24.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	27.22%
Values	Daily Returns

CVW CleanTech  vs.  Accretion Acquisition Corp

CVW CleanTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVW CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Accretion Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accretion Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Accretion Acquisition is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CVW CleanTech and Accretion Acquisition

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

The idea behind CVW CleanTech and Accretion 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.