Correlation Between PowerUp Acquisition and ClimateRock

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

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

Diversification Opportunities for PowerUp Acquisition and ClimateRock

-0.25

Correlation Coefficient

PowerUp Acquisition  ClimateRock

Very good diversification

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

Pair Corralation between PowerUp Acquisition and ClimateRock

Given the investment horizon of 90 days PowerUp Acquisition Corp is expected to generate 22.33 times more return on investment than ClimateRock. However, PowerUp Acquisition is 22.33 times more volatile than ClimateRock Class A. It trades about 0.01 of its potential returns per unit of risk. ClimateRock Class A is currently generating about 0.21 per unit of risk. If you would invest  1,144  in PowerUp Acquisition Corp on September 16, 2024 and sell it today you would lose (1.00) from holding PowerUp Acquisition Corp or give up 0.09% of portfolio value over 90 days.

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

PowerUp Acquisition Corp  vs.  ClimateRock Class A

PowerUp Acquisition Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, PowerUp Acquisition is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

ClimateRock Class

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ClimateRock Class A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ClimateRock is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PowerUp Acquisition and ClimateRock

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

The idea behind PowerUp Acquisition Corp and ClimateRock Class A 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.