Correlation Between AlphaVest Acquisition and FIAC Old

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

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

Diversification Opportunities for AlphaVest Acquisition and FIAC Old

0.66

Correlation Coefficient

AlphaVest Acquisition  FIAC Old

Poor diversification

The 3 months correlation between AlphaVest and FIAC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AlphaVest Acquisition Corp and FIAC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIAC Old and AlphaVest 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 AlphaVest Acquisition Corp are associated (or correlated) with FIAC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIAC Old has no effect on the direction of AlphaVest Acquisition i.e., AlphaVest Acquisition and FIAC Old go up and down completely randomly.

Pair Corralation between AlphaVest Acquisition and FIAC Old

Given the investment horizon of 90 days AlphaVest Acquisition Corp is expected to generate 6.8 times more return on investment than FIAC Old. However, AlphaVest Acquisition is 6.8 times more volatile than FIAC Old. It trades about 0.05 of its potential returns per unit of risk. FIAC Old is currently generating about -0.01 per unit of risk. If you would invest  0.00  in AlphaVest Acquisition Corp on October 10, 2024 and sell it today you would earn a total of  1,140  from holding AlphaVest Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AlphaVest Acquisition Corp  vs.  FIAC Old

AlphaVest Acquisition

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaVest Acquisition Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable primary indicators, AlphaVest Acquisition is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

FIAC Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AlphaVest Acquisition and FIAC Old

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

The idea behind AlphaVest Acquisition Corp and FIAC Old 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.