Correlation Between AlphaVest Acquisition and BurTech Acquisition
Can any of the company-specific risk be diversified away by investing in both AlphaVest Acquisition and BurTech Acquisition 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 AlphaVest Acquisition and BurTech Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlphaVest Acquisition Corp and BurTech Acquisition Corp, you can compare the effects of market volatilities on AlphaVest Acquisition and BurTech Acquisition 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 AlphaVest Acquisition with a short position of BurTech Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlphaVest Acquisition and BurTech Acquisition.
Diversification Opportunities for AlphaVest Acquisition and BurTech Acquisition
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AlphaVest and BurTech is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding AlphaVest Acquisition Corp and BurTech Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BurTech Acquisition Corp and AlphaVest 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 AlphaVest Acquisition Corp are associated (or correlated) with BurTech Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BurTech Acquisition Corp has no effect on the direction of AlphaVest Acquisition i.e., AlphaVest Acquisition and BurTech Acquisition go up and down completely randomly.
Pair Corralation between AlphaVest Acquisition and BurTech Acquisition
Given the investment horizon of 90 days AlphaVest Acquisition is expected to generate 1.97 times less return on investment than BurTech Acquisition. But when comparing it to its historical volatility, AlphaVest Acquisition Corp is 3.16 times less risky than BurTech Acquisition. It trades about 0.32 of its potential returns per unit of risk. BurTech Acquisition Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,137 in BurTech Acquisition Corp on August 29, 2024 and sell it today you would earn a total of 10.00 from holding BurTech Acquisition Corp or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AlphaVest Acquisition Corp vs. BurTech Acquisition Corp
Performance |
| Timeline |
| AlphaVest Acquisition |
| BurTech Acquisition Corp |
AlphaVest Acquisition and BurTech Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlphaVest Acquisition and BurTech Acquisition
The main advantage of trading using opposite AlphaVest Acquisition and BurTech Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlphaVest Acquisition position performs unexpectedly, BurTech Acquisition 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 BurTech Acquisition will offset losses from the drop in BurTech Acquisition's long position.The idea behind AlphaVest Acquisition Corp and BurTech Acquisition Corp 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.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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