Correlation Between SHUAA Partners and ClimateRock

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

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

Diversification Opportunities for SHUAA Partners and ClimateRock

0.8

Correlation Coefficient

SHUAA Partners  ClimateRock

Very poor diversification

The 3 months correlation between SHUAA and ClimateRock is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SHUAA Partners Acquisition and ClimateRock Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Class and SHUAA Partners 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 SHUAA Partners Acquisition 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 SHUAA Partners i.e., SHUAA Partners and ClimateRock go up and down completely randomly.

Pair Corralation between SHUAA Partners and ClimateRock

If you would invest  1,164  in ClimateRock Class A on September 16, 2024 and sell it today you would earn a total of  11.00  from holding ClimateRock Class A or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	4.76%
Values	Daily Returns

SHUAA Partners Acquisition  vs.  ClimateRock Class A

SHUAA Partners Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHUAA Partners Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SHUAA Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 SHUAA Partners and ClimateRock

The main advantage of trading using opposite SHUAA Partners and ClimateRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHUAA Partners 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 SHUAA Partners Acquisition 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.