Correlation Between Broad Capital and AlphaVest Acquisition

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

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

Diversification Opportunities for Broad Capital and AlphaVest Acquisition

-0.5

Correlation Coefficient

Broad Capital  AlphaVest Acquisition

Very good diversification

The 3 months correlation between Broad and AlphaVest is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition and Broad Capital 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 Broad Capital Acquisition are associated (or correlated) with AlphaVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaVest Acquisition has no effect on the direction of Broad Capital i.e., Broad Capital and AlphaVest Acquisition go up and down completely randomly.

Pair Corralation between Broad Capital and AlphaVest Acquisition

Assuming the 90 days horizon Broad Capital Acquisition is expected to under-perform the AlphaVest Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Broad Capital Acquisition is 14.73 times less risky than AlphaVest Acquisition. The stock trades about -0.13 of its potential returns per unit of risk. The AlphaVest Acquisition Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  15.00  in AlphaVest Acquisition Corp on September 12, 2024 and sell it today you would earn a total of  1.00  from holding AlphaVest Acquisition Corp or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	66.67%
Values	Daily Returns

Broad Capital Acquisition  vs.  AlphaVest Acquisition Corp

Broad Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broad Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AlphaVest Acquisition

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaVest Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, AlphaVest Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broad Capital and AlphaVest Acquisition

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

The idea behind Broad Capital Acquisition and AlphaVest Acquisition Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.