Correlation Between New Generation and Altimar Acquisition

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

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

Diversification Opportunities for New Generation and Altimar Acquisition

-0.17

Correlation Coefficient

New Generation  Altimar Acquisition

Good diversification

The 3 months correlation between New and Altimar is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding New Generation Consumer and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp and New Generation 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 New Generation Consumer are associated (or correlated) with Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of New Generation i.e., New Generation and Altimar Acquisition go up and down completely randomly.

Pair Corralation between New Generation and Altimar Acquisition

If you would invest  0.08  in New Generation Consumer on September 5, 2024 and sell it today you would lose (0.01) from holding New Generation Consumer or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

New Generation Consumer  vs.  Altimar Acquisition Corp

New Generation Consumer

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in New Generation Consumer are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, New Generation reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with New Generation and Altimar Acquisition

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

The idea behind New Generation Consumer and Altimar 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.