Correlation Between AlphaTime Acquisition and AIB Acquisition

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

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

Diversification Opportunities for AlphaTime Acquisition and AIB Acquisition

-0.36

Correlation Coefficient

AlphaTime Acquisition  AIB Acquisition

Very good diversification

The 3 months correlation between AlphaTime and AIB is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AlphaTime Acquisition Corp and AIB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Acquisition Corp and AlphaTime 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 AlphaTime Acquisition Corp are associated (or correlated) with AIB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Acquisition Corp has no effect on the direction of AlphaTime Acquisition i.e., AlphaTime Acquisition and AIB Acquisition go up and down completely randomly.

Pair Corralation between AlphaTime Acquisition and AIB Acquisition

If you would invest  1,116  in AlphaTime Acquisition Corp on September 5, 2024 and sell it today you would earn a total of  15.00  from holding AlphaTime Acquisition Corp or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

AlphaTime Acquisition Corp  vs.  AIB Acquisition Corp

AlphaTime Acquisition

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaTime Acquisition Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, AlphaTime Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AIB Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIB Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, AIB Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AlphaTime Acquisition and AIB Acquisition

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

The idea behind AlphaTime Acquisition Corp and AIB 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.