Correlation Between Slam Corp and Tastemaker Acquisition
Can any of the company-specific risk be diversified away by investing in both Slam Corp and Tastemaker 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 Slam Corp and Tastemaker Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slam Corp and Tastemaker Acquisition Corp, you can compare the effects of market volatilities on Slam Corp and Tastemaker 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 Slam Corp with a short position of Tastemaker Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slam Corp and Tastemaker Acquisition.
Diversification Opportunities for Slam Corp and Tastemaker Acquisition
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Slam and Tastemaker is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Slam Corp and Tastemaker Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tastemaker Acquisition and Slam Corp 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 Slam Corp are associated (or correlated) with Tastemaker Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tastemaker Acquisition has no effect on the direction of Slam Corp i.e., Slam Corp and Tastemaker Acquisition go up and down completely randomly.
Pair Corralation between Slam Corp and Tastemaker Acquisition
Assuming the 90 days horizon Slam Corp is expected to generate 3.03 times more return on investment than Tastemaker Acquisition. However, Slam Corp is 3.03 times more volatile than Tastemaker Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. Tastemaker Acquisition Corp is currently generating about 0.06 per unit of risk. If you would invest 8.51 in Slam Corp on August 30, 2024 and sell it today you would earn a total of 3.49 from holding Slam Corp or generate 41.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.38% |
| Values | Daily Returns |
Slam Corp vs. Tastemaker Acquisition Corp
Performance |
| Timeline |
| Slam Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tastemaker Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Slam Corp and Tastemaker Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slam Corp and Tastemaker Acquisition
The main advantage of trading using opposite Slam Corp and Tastemaker Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slam Corp position performs unexpectedly, Tastemaker 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 Tastemaker Acquisition will offset losses from the drop in Tastemaker Acquisition's long position.The idea behind Slam Corp and Tastemaker 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.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |