Correlation Between A SPAC and ATAKW Old
Can any of the company-specific risk be diversified away by investing in both A SPAC and ATAKW Old 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 A SPAC and ATAKW Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A SPAC I and ATAKW Old, you can compare the effects of market volatilities on A SPAC and ATAKW Old 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 A SPAC with a short position of ATAKW Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of A SPAC and ATAKW Old.
Diversification Opportunities for A SPAC and ATAKW Old
Good diversification
The 3 months correlation between ASCAW and ATAKW is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding A SPAC I and ATAKW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATAKW Old and A SPAC 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 A SPAC I are associated (or correlated) with ATAKW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATAKW Old has no effect on the direction of A SPAC i.e., A SPAC and ATAKW Old go up and down completely randomly.
Pair Corralation between A SPAC and ATAKW Old
Assuming the 90 days horizon A SPAC is expected to generate 1.94 times less return on investment than ATAKW Old. But when comparing it to its historical volatility, A SPAC I is 1.15 times less risky than ATAKW Old. It trades about 0.05 of its potential returns per unit of risk. ATAKW Old is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.66 in ATAKW Old on October 9, 2024 and sell it today you would earn a total of 0.19 from holding ATAKW Old or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.86% |
| Values | Daily Returns |
A SPAC I vs. ATAKW Old
Performance |
| Timeline |
| A SPAC I |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ATAKW Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
A SPAC and ATAKW Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A SPAC and ATAKW Old
The main advantage of trading using opposite A SPAC and ATAKW Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A SPAC position performs unexpectedly, ATAKW Old 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 ATAKW Old will offset losses from the drop in ATAKW Old's long position.The idea behind A SPAC I and ATAKW Old 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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