Correlation Between Altitude Acquisition and Malacca Straits
Can any of the company-specific risk be diversified away by investing in both Altitude Acquisition and Malacca Straits 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 Altitude Acquisition and Malacca Straits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altitude Acquisition Corp and Malacca Straits Acquisition, you can compare the effects of market volatilities on Altitude Acquisition and Malacca Straits 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 Altitude Acquisition with a short position of Malacca Straits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altitude Acquisition and Malacca Straits.
Diversification Opportunities for Altitude Acquisition and Malacca Straits
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altitude and Malacca is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Altitude Acquisition Corp and Malacca Straits Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malacca Straits Acqu and Altitude 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 Altitude Acquisition Corp are associated (or correlated) with Malacca Straits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malacca Straits Acqu has no effect on the direction of Altitude Acquisition i.e., Altitude Acquisition and Malacca Straits go up and down completely randomly.
Pair Corralation between Altitude Acquisition and Malacca Straits
If you would invest 0.14 in Malacca Straits Acquisition on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Malacca Straits Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altitude Acquisition Corp vs. Malacca Straits Acquisition
Performance |
| Timeline |
| Altitude Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Malacca Straits Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Altitude Acquisition and Malacca Straits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altitude Acquisition and Malacca Straits
The main advantage of trading using opposite Altitude Acquisition and Malacca Straits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altitude Acquisition position performs unexpectedly, Malacca Straits 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 Malacca Straits will offset losses from the drop in Malacca Straits' long position.The idea behind Altitude Acquisition Corp and Malacca Straits Acquisition 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.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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