Correlation Between Anzu Special and Atlantic Coastal

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

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

Diversification Opportunities for Anzu Special and Atlantic Coastal

0.44

Correlation Coefficient

Anzu Special  Atlantic Coastal

Very weak diversification

The 3 months correlation between Anzu and Atlantic is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anzu Special Acquisition and Atlantic Coastal Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Coastal Acq and Anzu Special 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 Anzu Special Acquisition are associated (or correlated) with Atlantic Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Coastal Acq has no effect on the direction of Anzu Special i.e., Anzu Special and Atlantic Coastal go up and down completely randomly.

Pair Corralation between Anzu Special and Atlantic Coastal

Assuming the 90 days horizon Anzu Special is expected to generate 1.13 times less return on investment than Atlantic Coastal. In addition to that, Anzu Special is 1.9 times more volatile than Atlantic Coastal Acquisition. It trades about 0.04 of its total potential returns per unit of risk. Atlantic Coastal Acquisition is currently generating about 0.09 per unit of volatility. If you would invest  1,002  in Atlantic Coastal Acquisition on September 25, 2024 and sell it today you would earn a total of  38.00  from holding Atlantic Coastal Acquisition or generate 3.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.28%
Values	Daily Returns

Anzu Special Acquisition  vs.  Atlantic Coastal Acquisition

Anzu Special Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atlantic Coastal Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic Coastal Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Atlantic Coastal 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 Anzu Special and Atlantic Coastal

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

The idea behind Anzu Special Acquisition and Atlantic Coastal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.