Correlation Between Vita Coco and Altimar Acquisition

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

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

Diversification Opportunities for Vita Coco and Altimar Acquisition

-0.07

Correlation Coefficient

Vita Coco  Altimar Acquisition

Good diversification

The 3 months correlation between Vita and Altimar is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp and Vita Coco 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 Vita Coco are associated (or correlated) with Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of Vita Coco i.e., Vita Coco and Altimar Acquisition go up and down completely randomly.

Pair Corralation between Vita Coco and Altimar Acquisition

Given the investment horizon of 90 days Vita Coco is expected to generate 328.93 times less return on investment than Altimar Acquisition. But when comparing it to its historical volatility, Vita Coco is 75.78 times less risky than Altimar Acquisition. It trades about 0.08 of its potential returns per unit of risk. Altimar Acquisition Corp is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Altimar Acquisition Corp on September 14, 2024 and sell it today you would earn a total of  4.90  from holding Altimar Acquisition Corp or generate 4900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.45%
Values	Daily Returns

Vita Coco  vs.  Altimar Acquisition Corp

Vita Coco

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

Altimar Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altimar Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altimar Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vita Coco and Altimar Acquisition

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

The idea behind Vita Coco and Altimar 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 CEOs Directory module to screen CEOs from public companies around the world.