Correlation Between Alpha One and Marblegate Acquisition

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

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

Diversification Opportunities for Alpha One and Marblegate Acquisition

0.86

Correlation Coefficient

Alpha One  Marblegate Acquisition

Very poor diversification

The 3 months correlation between Alpha and Marblegate is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alpha One and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate Acquisition and Alpha One 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 One are associated (or correlated) with Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Alpha One i.e., Alpha One and Marblegate Acquisition go up and down completely randomly.

Pair Corralation between Alpha One and Marblegate Acquisition

Given the investment horizon of 90 days Alpha One is expected to under-perform the Marblegate Acquisition. In addition to that, Alpha One is 16.9 times more volatile than Marblegate Acquisition Corp. It trades about -0.12 of its total potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about -0.07 per unit of volatility. If you would invest  1,113  in Marblegate Acquisition Corp on December 1, 2024 and sell it today you would lose (13.00) from holding Marblegate Acquisition Corp or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Alpha One  vs.  Marblegate Acquisition Corp

Alpha One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Marblegate Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marblegate Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Marblegate Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Alpha One and Marblegate Acquisition

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

The idea behind Alpha One and Marblegate 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.