Correlation Between FTAC Emerald and ALSP Orchid
Can any of the company-specific risk be diversified away by investing in both FTAC Emerald and ALSP Orchid 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 FTAC Emerald and ALSP Orchid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAC Emerald Acquisition and ALSP Orchid Acquisition, you can compare the effects of market volatilities on FTAC Emerald and ALSP Orchid 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 FTAC Emerald with a short position of ALSP Orchid. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAC Emerald and ALSP Orchid.
Diversification Opportunities for FTAC Emerald and ALSP Orchid
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTAC and ALSP is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FTAC Emerald Acquisition and ALSP Orchid Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALSP Orchid Acquisition and FTAC Emerald 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 FTAC Emerald Acquisition are associated (or correlated) with ALSP Orchid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALSP Orchid Acquisition has no effect on the direction of FTAC Emerald i.e., FTAC Emerald and ALSP Orchid go up and down completely randomly.
Pair Corralation between FTAC Emerald and ALSP Orchid
Given the investment horizon of 90 days FTAC Emerald is expected to generate 1.17 times less return on investment than ALSP Orchid. In addition to that, FTAC Emerald is 1.68 times more volatile than ALSP Orchid Acquisition. It trades about 0.09 of its total potential returns per unit of risk. ALSP Orchid Acquisition is currently generating about 0.18 per unit of volatility. If you would invest 1,023 in ALSP Orchid Acquisition on August 30, 2024 and sell it today you would earn a total of 45.00 from holding ALSP Orchid Acquisition or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 37.35% |
| Values | Daily Returns |
FTAC Emerald Acquisition vs. ALSP Orchid Acquisition
Performance |
| Timeline |
| FTAC Emerald Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ALSP Orchid Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FTAC Emerald and ALSP Orchid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAC Emerald and ALSP Orchid
The main advantage of trading using opposite FTAC Emerald and ALSP Orchid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAC Emerald position performs unexpectedly, ALSP Orchid 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 ALSP Orchid will offset losses from the drop in ALSP Orchid's long position.| FTAC Emerald vs. Athena Technology Acquisition | FTAC Emerald vs. A SPAC II | FTAC Emerald vs. Patria Latin American | FTAC Emerald vs. Healthcare AI Acquisition |
| ALSP Orchid vs. Alpha Star Acquisition | ALSP Orchid vs. Alpha One | ALSP Orchid vs. Athena Technology Acquisition | ALSP Orchid vs. A SPAC II |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |