Correlation Between A SPAC and Alpha One
Can any of the company-specific risk be diversified away by investing in both A SPAC and Alpha One 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 Alpha One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A SPAC II and Alpha One, you can compare the effects of market volatilities on A SPAC and Alpha One 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 Alpha One. Check out your portfolio center. Please also check ongoing floating volatility patterns of A SPAC and Alpha One.
Diversification Opportunities for A SPAC and Alpha One
Pay attention - limited upside
The 3 months correlation between ASCB and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding A SPAC II and Alpha One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha One 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 II are associated (or correlated) with Alpha One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha One has no effect on the direction of A SPAC i.e., A SPAC and Alpha One go up and down completely randomly.
Pair Corralation between A SPAC and Alpha One
Given the investment horizon of 90 days A SPAC is expected to generate 7.62 times less return on investment than Alpha One. But when comparing it to its historical volatility, A SPAC II is 6.3 times less risky than Alpha One. It trades about 0.02 of its potential returns per unit of risk. Alpha One is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 251.00 in Alpha One on August 30, 2024 and sell it today you would lose (13.00) from holding Alpha One or give up 5.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
A SPAC II vs. Alpha One
Performance |
| Timeline |
| A SPAC II |
| Alpha One |
A SPAC and Alpha One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A SPAC and Alpha One
The main advantage of trading using opposite A SPAC and Alpha One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A SPAC position performs unexpectedly, Alpha One 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 Alpha One will offset losses from the drop in Alpha One's long position.The idea behind A SPAC II and Alpha One 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.| Alpha One vs. American Hotel Income | Alpha One vs. Triton International Limited | Alpha One vs. Willscot Mobile Mini | Alpha One vs. Starbucks |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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