Correlation Between Altimar Acquisition and Broad Capital

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

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

Diversification Opportunities for Altimar Acquisition and Broad Capital

0.06

Correlation Coefficient

Altimar Acquisition  Broad Capital

Significant diversification

The 3 months correlation between Altimar and Broad is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Altimar Acquisition Corp and Broad Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broad Capital Acquisition and Altimar Acquisition 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 Altimar Acquisition Corp are associated (or correlated) with Broad Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broad Capital Acquisition has no effect on the direction of Altimar Acquisition i.e., Altimar Acquisition and Broad Capital go up and down completely randomly.

Pair Corralation between Altimar Acquisition and Broad Capital

Assuming the 90 days horizon Altimar Acquisition Corp is expected to generate 344.59 times more return on investment than Broad Capital. However, Altimar Acquisition is 344.59 times more volatile than Broad Capital Acquisition. It trades about 0.36 of its potential returns per unit of risk. Broad Capital Acquisition is currently generating about 0.03 per unit of risk. If you would invest  0.10  in Altimar Acquisition Corp on September 21, 2024 and sell it today you would earn a total of  4.90  from holding Altimar Acquisition Corp or generate 4900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.44%
Values	Daily Returns

Altimar Acquisition Corp  vs.  Broad Capital Acquisition

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.

Broad Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Altimar Acquisition and Broad Capital

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

The idea behind Altimar Acquisition Corp and Broad Capital 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.

Check out your portfolio center.

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 Managers module to screen money managers from public funds and ETFs managed around the world.