Correlation Between TKB Critical and AlphaVest Acquisition
Can any of the company-specific risk be diversified away by investing in both TKB Critical and AlphaVest 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 TKB Critical and AlphaVest Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKB Critical Technologies and AlphaVest Acquisition Corp, you can compare the effects of market volatilities on TKB Critical and AlphaVest 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 TKB Critical with a short position of AlphaVest Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKB Critical and AlphaVest Acquisition.
Diversification Opportunities for TKB Critical and AlphaVest Acquisition
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TKB and AlphaVest is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding TKB Critical Technologies and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition and TKB Critical 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 TKB Critical Technologies are associated (or correlated) with AlphaVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaVest Acquisition has no effect on the direction of TKB Critical i.e., TKB Critical and AlphaVest Acquisition go up and down completely randomly.
Pair Corralation between TKB Critical and AlphaVest Acquisition
Assuming the 90 days horizon TKB Critical is expected to generate 4.82 times less return on investment than AlphaVest Acquisition. But when comparing it to its historical volatility, TKB Critical Technologies is 3.7 times less risky than AlphaVest Acquisition. It trades about 0.04 of its potential returns per unit of risk. AlphaVest Acquisition Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in AlphaVest Acquisition Corp on August 28, 2024 and sell it today you would earn a total of 1,125 from holding AlphaVest Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.61% |
| Values | Daily Returns |
TKB Critical Technologies vs. AlphaVest Acquisition Corp
Performance |
| Timeline |
| TKB Critical Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AlphaVest Acquisition |
TKB Critical and AlphaVest Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKB Critical and AlphaVest Acquisition
The main advantage of trading using opposite TKB Critical and AlphaVest Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKB Critical position performs unexpectedly, AlphaVest 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 AlphaVest Acquisition will offset losses from the drop in AlphaVest Acquisition's long position.| TKB Critical vs. American Axle Manufacturing | TKB Critical vs. Cars Inc | TKB Critical vs. Viemed Healthcare | TKB Critical vs. Magna International |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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