Correlation Between AlphaTime Acquisition and Erayak Power
Can any of the company-specific risk be diversified away by investing in both AlphaTime Acquisition and Erayak Power 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 AlphaTime Acquisition and Erayak Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlphaTime Acquisition Corp and Erayak Power Solution, you can compare the effects of market volatilities on AlphaTime Acquisition and Erayak Power 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 AlphaTime Acquisition with a short position of Erayak Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlphaTime Acquisition and Erayak Power.
Diversification Opportunities for AlphaTime Acquisition and Erayak Power
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AlphaTime and Erayak is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AlphaTime Acquisition Corp and Erayak Power Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erayak Power Solution and AlphaTime 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 AlphaTime Acquisition Corp are associated (or correlated) with Erayak Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erayak Power Solution has no effect on the direction of AlphaTime Acquisition i.e., AlphaTime Acquisition and Erayak Power go up and down completely randomly.
Pair Corralation between AlphaTime Acquisition and Erayak Power
Assuming the 90 days horizon AlphaTime Acquisition is expected to generate 5.44 times less return on investment than Erayak Power. But when comparing it to its historical volatility, AlphaTime Acquisition Corp is 13.69 times less risky than Erayak Power. It trades about 0.04 of its potential returns per unit of risk. Erayak Power Solution is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Erayak Power Solution on September 2, 2024 and sell it today you would lose (101.00) from holding Erayak Power Solution or give up 45.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AlphaTime Acquisition Corp vs. Erayak Power Solution
Performance |
| Timeline |
| AlphaTime Acquisition |
| Erayak Power Solution |
AlphaTime Acquisition and Erayak Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlphaTime Acquisition and Erayak Power
The main advantage of trading using opposite AlphaTime Acquisition and Erayak Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlphaTime Acquisition position performs unexpectedly, Erayak Power 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 Erayak Power will offset losses from the drop in Erayak Power's long position.| AlphaTime Acquisition vs. Horizon Space Acquisition | AlphaTime Acquisition vs. AlphaVest Acquisition Corp | AlphaTime Acquisition vs. Israel Acquisitions Corp |
| Erayak Power vs. NeoVolta Common Stock | Erayak Power vs. Hayward Holdings | Erayak Power vs. Advanced Energy Industries | Erayak Power vs. Espey Mfg Electronics |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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