Correlation Between Microvast Holdings and Tastemaker Acquisition

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

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

Diversification Opportunities for Microvast Holdings and Tastemaker Acquisition

-0.47

Correlation Coefficient

Microvast Holdings  Tastemaker Acquisition

Very good diversification

The 3 months correlation between Microvast and Tastemaker is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Tastemaker Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tastemaker Acquisition and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with Tastemaker Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tastemaker Acquisition has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Tastemaker Acquisition go up and down completely randomly.

Pair Corralation between Microvast Holdings and Tastemaker Acquisition

If you would invest  2.50  in Microvast Holdings on September 17, 2024 and sell it today you would earn a total of  12.50  from holding Microvast Holdings or generate 500.0% return on investment over 90 days.

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

Microvast Holdings  vs.  Tastemaker Acquisition Corp

Microvast Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microvast Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Microvast Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Tastemaker Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tastemaker Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tastemaker Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Microvast Holdings and Tastemaker Acquisition

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

The idea behind Microvast Holdings and Tastemaker 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.