Correlation Between HCM Acquisition and Altimar Acquisition
Can any of the company-specific risk be diversified away by investing in both HCM Acquisition and Altimar 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 HCM Acquisition and Altimar Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCM Acquisition Corp and Altimar Acquisition Corp, you can compare the effects of market volatilities on HCM Acquisition and Altimar 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 HCM Acquisition with a short position of Altimar Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCM Acquisition and Altimar Acquisition.
Diversification Opportunities for HCM Acquisition and Altimar Acquisition
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between HCM and Altimar is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding HCM Acquisition Corp and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp and HCM 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 HCM Acquisition Corp are associated (or correlated) with Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of HCM Acquisition i.e., HCM Acquisition and Altimar Acquisition go up and down completely randomly.
Pair Corralation between HCM Acquisition and Altimar Acquisition
Assuming the 90 days horizon HCM Acquisition Corp is expected to under-perform the Altimar Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, HCM Acquisition Corp is 11.86 times less risky than Altimar Acquisition. The stock trades about -0.18 of its potential returns per unit of risk. The Altimar Acquisition Corp is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Altimar Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Altimar Acquisition Corp or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.0% |
| Values | Daily Returns |
HCM Acquisition Corp vs. Altimar Acquisition Corp
Performance |
| Timeline |
| HCM Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Altimar Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HCM Acquisition and Altimar Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCM Acquisition and Altimar Acquisition
The main advantage of trading using opposite HCM Acquisition and Altimar Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCM Acquisition position performs unexpectedly, Altimar 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 Altimar Acquisition will offset losses from the drop in Altimar Acquisition's long position.The idea behind HCM Acquisition Corp and Altimar 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.| Altimar Acquisition vs. Kite Realty Group | Altimar Acquisition vs. SunLink Health Systems | Altimar Acquisition vs. National Vision Holdings | Altimar Acquisition vs. BBB Foods |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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