Correlation Between Altimar Acquisition and Forum Merger

Can any of the company-specific risk be diversified away by investing in both Altimar Acquisition and Forum Merger 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 Forum Merger 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 Forum Merger IV, you can compare the effects of market volatilities on Altimar Acquisition and Forum Merger 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 Forum Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altimar Acquisition and Forum Merger.

Diversification Opportunities for Altimar Acquisition and Forum Merger

-0.05

Correlation Coefficient

Altimar Acquisition  Forum Merger

Good diversification

The 3 months correlation between Altimar and Forum is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Altimar Acquisition Corp and Forum Merger IV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Merger IV 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 Forum Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Merger IV has no effect on the direction of Altimar Acquisition i.e., Altimar Acquisition and Forum Merger go up and down completely randomly.

Pair Corralation between Altimar Acquisition and Forum Merger

Assuming the 90 days horizon Altimar Acquisition Corp is expected to generate 1162.2 times more return on investment than Forum Merger. However, Altimar Acquisition is 1162.2 times more volatile than Forum Merger IV. It trades about 0.36 of its potential returns per unit of risk. Forum Merger IV is currently generating about 0.13 per unit of risk. If you would invest  0.10  in Altimar Acquisition Corp on September 30, 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 Against
Strength	Insignificant
Accuracy	16.92%
Values	Daily Returns

Altimar Acquisition Corp  vs.  Forum Merger IV

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.

Forum Merger IV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forum Merger IV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Forum Merger is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Altimar Acquisition and Forum Merger

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

The idea behind Altimar Acquisition Corp and Forum Merger IV 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.