Correlation Between Altimar Acquisition and Investcorp Europe

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

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

Diversification Opportunities for Altimar Acquisition and Investcorp Europe

-0.04

Correlation Coefficient

Altimar Acquisition  Investcorp Europe

Good diversification

The 3 months correlation between Altimar and Investcorp is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Altimar Acquisition Corp and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe and Altimar 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 Altimar Acquisition Corp are associated (or correlated) with Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of Altimar Acquisition i.e., Altimar Acquisition and Investcorp Europe go up and down completely randomly.

Pair Corralation between Altimar Acquisition and Investcorp Europe

If you would invest  1,090  in Investcorp Europe Acquisition on September 16, 2024 and sell it today you would earn a total of  74.00  from holding Investcorp Europe Acquisition or generate 6.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Altimar Acquisition Corp  vs.  Investcorp Europe Acquisition

Altimar Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altimar Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altimar Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Investcorp Europe

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Europe Acquisition are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, Investcorp Europe may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Altimar Acquisition and Investcorp Europe

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

The idea behind Altimar Acquisition Corp and Investcorp Europe Acquisition 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.