Correlation Between Alpha Star and Athena Technology
Can any of the company-specific risk be diversified away by investing in both Alpha Star and Athena Technology 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 Alpha Star and Athena Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Star Acquisition and Athena Technology Acquisition, you can compare the effects of market volatilities on Alpha Star and Athena Technology 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 Alpha Star with a short position of Athena Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Star and Athena Technology.
Diversification Opportunities for Alpha Star and Athena Technology
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alpha and Athena is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Star Acquisition and Athena Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athena Technology and Alpha Star 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 Alpha Star Acquisition are associated (or correlated) with Athena Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athena Technology has no effect on the direction of Alpha Star i.e., Alpha Star and Athena Technology go up and down completely randomly.
Pair Corralation between Alpha Star and Athena Technology
Given the investment horizon of 90 days Alpha Star Acquisition is expected to generate 0.16 times more return on investment than Athena Technology. However, Alpha Star Acquisition is 6.45 times less risky than Athena Technology. It trades about 0.04 of its potential returns per unit of risk. Athena Technology Acquisition is currently generating about -0.03 per unit of risk. If you would invest 1,178 in Alpha Star Acquisition on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Alpha Star Acquisition or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alpha Star Acquisition vs. Athena Technology Acquisition
Performance |
| Timeline |
| Alpha Star Acquisition |
| Athena Technology |
Alpha Star and Athena Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Star and Athena Technology
The main advantage of trading using opposite Alpha Star and Athena Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Star position performs unexpectedly, Athena Technology 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 Athena Technology will offset losses from the drop in Athena Technology's long position.| Alpha Star vs. A SPAC II | Alpha Star vs. Alpha One | Alpha Star vs. Athena Technology Acquisition | Alpha Star vs. Patria Latin American |
| Athena Technology vs. Alpha Star Acquisition | Athena Technology vs. Alpha One | Athena Technology vs. A SPAC II |
Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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