Correlation Between AltC Acquisition and Green Planet

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

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

Diversification Opportunities for AltC Acquisition and Green Planet

0.44

Correlation Coefficient

AltC Acquisition  Green Planet

Very weak diversification

The 3 months correlation between AltC and Green is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AltC Acquisition Corp and Green Planet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Planet Bio and AltC 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 AltC Acquisition Corp are associated (or correlated) with Green Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Planet Bio has no effect on the direction of AltC Acquisition i.e., AltC Acquisition and Green Planet go up and down completely randomly.

Pair Corralation between AltC Acquisition and Green Planet

Given the investment horizon of 90 days AltC Acquisition is expected to generate 277.12 times less return on investment than Green Planet. But when comparing it to its historical volatility, AltC Acquisition Corp is 241.74 times less risky than Green Planet. It trades about 0.08 of its potential returns per unit of risk. Green Planet Bio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  241.00  in Green Planet Bio on September 18, 2024 and sell it today you would lose (187.00) from holding Green Planet Bio or give up 77.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	28.69%
Values	Daily Returns

AltC Acquisition Corp  vs.  Green Planet Bio

AltC Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AltC Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, AltC Acquisition is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Green Planet Bio

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green Planet Bio are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent essential indicators, Green Planet sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AltC Acquisition and Green Planet

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

The idea behind AltC Acquisition Corp and Green Planet Bio 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.