Correlation Between AlphaVest Acquisition and NETGEAR

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

Diversification Opportunities for AlphaVest Acquisition and NETGEAR

-0.09

Correlation Coefficient

AlphaVest Acquisition  NETGEAR

Good diversification

The 3 months correlation between AlphaVest and NETGEAR is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding AlphaVest Acquisition Corp and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of AlphaVest Acquisition i.e., AlphaVest Acquisition and NETGEAR go up and down completely randomly.

Pair Corralation between AlphaVest Acquisition and NETGEAR

Assuming the 90 days horizon AlphaVest Acquisition Corp is expected to generate 35.64 times more return on investment than NETGEAR. However, AlphaVest Acquisition is 35.64 times more volatile than NETGEAR. It trades about 0.11 of its potential returns per unit of risk. NETGEAR is currently generating about 0.04 per unit of risk. If you would invest  0.00  in AlphaVest Acquisition Corp on October 9, 2024 and sell it today you would earn a total of  14.00  from holding AlphaVest Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.82%
Values	Daily Returns

AlphaVest Acquisition Corp  vs.  NETGEAR

AlphaVest Acquisition

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaVest Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, AlphaVest Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

NETGEAR

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AlphaVest Acquisition and NETGEAR

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

The idea behind AlphaVest Acquisition Corp and NETGEAR 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.