Correlation Between NorthView Acquisition and ClimateRock Right

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

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

Diversification Opportunities for NorthView Acquisition and ClimateRock Right

0.22

Correlation Coefficient

NorthView Acquisition  ClimateRock Right

Modest diversification

The 3 months correlation between NorthView and ClimateRock is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NorthView Acquisition and ClimateRock Right in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Right and NorthView Acquisition 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 NorthView Acquisition 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 NorthView Acquisition i.e., NorthView Acquisition and ClimateRock Right go up and down completely randomly.

Pair Corralation between NorthView Acquisition and ClimateRock Right

Assuming the 90 days horizon NorthView Acquisition is expected to generate 4.67 times more return on investment than ClimateRock Right. However, NorthView Acquisition is 4.67 times more volatile than ClimateRock Right. It trades about 0.17 of its potential returns per unit of risk. ClimateRock Right is currently generating about 0.16 per unit of risk. If you would invest  4.01  in NorthView Acquisition on October 27, 2024 and sell it today you would earn a total of  4.48  from holding NorthView Acquisition or generate 111.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.84%
Values	Daily Returns

NorthView Acquisition  vs.  ClimateRock Right

NorthView Acquisition

Risk-Adjusted Performance

0 of 100

Good

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

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 NorthView Acquisition and ClimateRock Right

The main advantage of trading using opposite NorthView Acquisition and ClimateRock Right positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthView Acquisition 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 NorthView Acquisition 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.