Correlation Between Alpha Healthcare and FACT II

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

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

Diversification Opportunities for Alpha Healthcare and FACT II

0.0

Correlation Coefficient

Alpha Healthcare  FACT II

Pay attention - limited upside

The 3 months correlation between Alpha and FACT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Healthcare Acquisition and FACT II Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FACT II Acquisition and Alpha Healthcare 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 Alpha Healthcare Acquisition are associated (or correlated) with FACT II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FACT II Acquisition has no effect on the direction of Alpha Healthcare i.e., Alpha Healthcare and FACT II go up and down completely randomly.

Pair Corralation between Alpha Healthcare and FACT II

If you would invest  991.00  in FACT II Acquisition on December 18, 2024 and sell it today you would earn a total of  245.00  from holding FACT II Acquisition or generate 24.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alpha Healthcare Acquisition  vs.  FACT II Acquisition

Alpha Healthcare Acq

Risk-Adjusted Performance

Very Weak

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

FACT II Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FACT II Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, FACT II unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Healthcare and FACT II

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

The idea behind Alpha Healthcare Acquisition and FACT II Acquisition 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.