Correlation Between Athena Technology and Insight Acquisition

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

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

Diversification Opportunities for Athena Technology and Insight Acquisition

-0.04

Correlation Coefficient

Athena Technology  Insight Acquisition

Good diversification

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

Pair Corralation between Athena Technology and Insight Acquisition

Given the investment horizon of 90 days Athena Technology is expected to generate 4.56 times less return on investment than Insight Acquisition. But when comparing it to its historical volatility, Athena Technology Acquisition is 2.38 times less risky than Insight Acquisition. It trades about 0.04 of its potential returns per unit of risk. Insight Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,130  in Insight Acquisition Corp on September 3, 2024 and sell it today you would earn a total of  203.00  from holding Insight Acquisition Corp or generate 17.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Athena Technology Acquisition  vs.  Insight Acquisition Corp

Athena Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Athena Technology Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Athena Technology is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Insight Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Insight Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Insight Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Athena Technology and Insight Acquisition

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

The idea behind Athena Technology Acquisition and Insight 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 Transaction History module to view history of all your transactions and understand their impact on performance.