Correlation Between Berenson Acquisition and Alpha One

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

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

Diversification Opportunities for Berenson Acquisition and Alpha One

0.0

Correlation Coefficient

Berenson Acquisition  Alpha One

Pay attention - limited upside

The 3 months correlation between Berenson and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Berenson Acquisition Corp and Alpha One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha One and Berenson 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 Berenson Acquisition Corp are associated (or correlated) with Alpha One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha One has no effect on the direction of Berenson Acquisition i.e., Berenson Acquisition and Alpha One go up and down completely randomly.

Pair Corralation between Berenson Acquisition and Alpha One

Given the investment horizon of 90 days Berenson Acquisition is expected to generate 4.04 times less return on investment than Alpha One. But when comparing it to its historical volatility, Berenson Acquisition Corp is 4.46 times less risky than Alpha One. It trades about 0.06 of its potential returns per unit of risk. Alpha One is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Alpha One on September 20, 2024 and sell it today you would earn a total of  38.00  from holding Alpha One or generate 19.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	77.51%
Values	Daily Returns

Berenson Acquisition Corp  vs.  Alpha One

Berenson Acquisition Corp

Risk-Adjusted Performance

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Very Strong

Over the last 90 days Berenson Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak fundamental indicators, Berenson Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alpha One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alpha One is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Berenson Acquisition and Alpha One

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

The idea behind Berenson Acquisition Corp and Alpha One 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.