Correlation Between Athena Technology and Acri Capital

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

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

Diversification Opportunities for Athena Technology and Acri Capital

0.31

Correlation Coefficient

Athena Technology  Acri Capital

Weak diversification

The 3 months correlation between Athena and Acri is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Athena Technology Acquisition and Acri Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acri Capital Acquisition and Athena Technology 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 Athena Technology Acquisition are associated (or correlated) with Acri Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acri Capital Acquisition has no effect on the direction of Athena Technology i.e., Athena Technology and Acri Capital go up and down completely randomly.

Pair Corralation between Athena Technology and Acri Capital

Given the investment horizon of 90 days Athena Technology Acquisition is expected to generate 0.29 times more return on investment than Acri Capital. However, Athena Technology Acquisition is 3.48 times less risky than Acri Capital. It trades about 0.01 of its potential returns per unit of risk. Acri Capital Acquisition is currently generating about -0.03 per unit of risk. If you would invest  1,143  in Athena Technology Acquisition on September 13, 2024 and sell it today you would lose (10.00) from holding Athena Technology Acquisition or give up 0.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	19.05%
Values	Daily Returns

Athena Technology Acquisition  vs.  Acri Capital Acquisition

Athena Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athena Technology Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Athena Technology is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Acri Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acri Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Athena Technology and Acri Capital

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

The idea behind Athena Technology Acquisition and Acri 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.