Correlation Between Alpha Star and BurTech Acquisition

Can any of the company-specific risk be diversified away by investing in both Alpha Star and BurTech 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 Alpha Star and BurTech Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpha Star Acquisition and BurTech Acquisition Corp, you can compare the effects of market volatilities on Alpha Star and BurTech 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 Alpha Star with a short position of BurTech Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Star and BurTech Acquisition.

Diversification Opportunities for Alpha Star and BurTech Acquisition

0.68

Correlation Coefficient

Alpha Star  BurTech Acquisition

Poor diversification

The 3 months correlation between Alpha and BurTech is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Star Acquisition and BurTech Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BurTech Acquisition Corp and Alpha Star 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 Alpha Star Acquisition are associated (or correlated) with BurTech Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BurTech Acquisition Corp has no effect on the direction of Alpha Star i.e., Alpha Star and BurTech Acquisition go up and down completely randomly.

Pair Corralation between Alpha Star and BurTech Acquisition

Given the investment horizon of 90 days Alpha Star Acquisition is expected to generate 4.58 times more return on investment than BurTech Acquisition. However, Alpha Star is 4.58 times more volatile than BurTech Acquisition Corp. It trades about 0.03 of its potential returns per unit of risk. BurTech Acquisition Corp is currently generating about 0.1 per unit of risk. If you would invest  1,116  in Alpha Star Acquisition on September 15, 2024 and sell it today you would earn a total of  104.00  from holding Alpha Star Acquisition or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.17%
Values	Daily Returns

Alpha Star Acquisition  vs.  BurTech Acquisition Corp

Alpha Star Acquisition

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Star Acquisition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BurTech Acquisition Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BurTech Acquisition Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking signals, BurTech Acquisition is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alpha Star and BurTech Acquisition

The main advantage of trading using opposite Alpha Star and BurTech Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Star position performs unexpectedly, BurTech 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 BurTech Acquisition will offset losses from the drop in BurTech Acquisition's long position.

The idea behind Alpha Star Acquisition and BurTech 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.