Correlation Between Medtech Acquisition and Altitude Acquisition

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

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

Diversification Opportunities for Medtech Acquisition and Altitude Acquisition

0.1

Correlation Coefficient

Medtech Acquisition  Altitude Acquisition

Average diversification

The 3 months correlation between Medtech and Altitude is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Medtech Acquisition Corp and Altitude Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altitude Acquisition Corp and Medtech 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 Medtech Acquisition Corp are associated (or correlated) with Altitude Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altitude Acquisition Corp has no effect on the direction of Medtech Acquisition i.e., Medtech Acquisition and Altitude Acquisition go up and down completely randomly.

Pair Corralation between Medtech Acquisition and Altitude Acquisition

Assuming the 90 days horizon Medtech Acquisition Corp is expected to under-perform the Altitude Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Medtech Acquisition Corp is 1.18 times less risky than Altitude Acquisition. The stock trades about -0.04 of its potential returns per unit of risk. The Altitude Acquisition Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  993.00  in Altitude Acquisition Corp on September 19, 2024 and sell it today you would earn a total of  11.00  from holding Altitude Acquisition Corp or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.29%
Values	Daily Returns

Medtech Acquisition Corp  vs.  Altitude Acquisition Corp

Medtech Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medtech Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Medtech Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Altitude Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altitude Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Altitude Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Medtech Acquisition and Altitude Acquisition

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

The idea behind Medtech Acquisition Corp and Altitude 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.