Correlation Between Globalfoundries and AlphaTime Acquisition
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and AlphaTime 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 Globalfoundries and AlphaTime Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and AlphaTime Acquisition Corp, you can compare the effects of market volatilities on Globalfoundries and AlphaTime 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 Globalfoundries with a short position of AlphaTime Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and AlphaTime Acquisition.
Diversification Opportunities for Globalfoundries and AlphaTime Acquisition
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globalfoundries and AlphaTime is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and Globalfoundries 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 Globalfoundries are associated (or correlated) with AlphaTime Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaTime Acquisition has no effect on the direction of Globalfoundries i.e., Globalfoundries and AlphaTime Acquisition go up and down completely randomly.
Pair Corralation between Globalfoundries and AlphaTime Acquisition
Considering the 90-day investment horizon Globalfoundries is expected to under-perform the AlphaTime Acquisition. In addition to that, Globalfoundries is 4.58 times more volatile than AlphaTime Acquisition Corp. It trades about -0.03 of its total potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about 0.04 per unit of volatility. If you would invest 1,071 in AlphaTime Acquisition Corp on September 14, 2024 and sell it today you would earn a total of 63.00 from holding AlphaTime Acquisition Corp or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalfoundries vs. AlphaTime Acquisition Corp
Performance |
| Timeline |
| Globalfoundries |
| AlphaTime Acquisition |
Globalfoundries and AlphaTime Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and AlphaTime Acquisition
The main advantage of trading using opposite Globalfoundries and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, AlphaTime 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 AlphaTime Acquisition will offset losses from the drop in AlphaTime Acquisition's long position.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| AlphaTime Acquisition vs. Globalfoundries | AlphaTime Acquisition vs. MACOM Technology Solutions | AlphaTime Acquisition vs. Sandstorm Gold Ltd | AlphaTime Acquisition vs. CECO Environmental Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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