Correlation Between Dine Brands and AlphaVest Acquisition

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

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

Diversification Opportunities for Dine Brands and AlphaVest Acquisition

0.41

Correlation Coefficient

Dine Brands  AlphaVest Acquisition

Very weak diversification

The 3 months correlation between Dine and AlphaVest is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition and Dine Brands 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 Dine Brands Global 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 Dine Brands i.e., Dine Brands and AlphaVest Acquisition go up and down completely randomly.

Pair Corralation between Dine Brands and AlphaVest Acquisition

Considering the 90-day investment horizon Dine Brands Global is expected to under-perform the AlphaVest Acquisition. In addition to that, Dine Brands is 16.14 times more volatile than AlphaVest Acquisition Corp. It trades about -0.21 of its total potential returns per unit of risk. AlphaVest Acquisition Corp is currently generating about 0.28 per unit of volatility. If you would invest  1,123  in AlphaVest Acquisition Corp on September 16, 2024 and sell it today you would earn a total of  11.00  from holding AlphaVest Acquisition Corp or generate 0.98% return on investment over 90 days.

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

Dine Brands Global  vs.  AlphaVest Acquisition Corp

Dine Brands Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Dine Brands may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AlphaVest Acquisition

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaVest Acquisition Corp are ranked lower than 21 (%) 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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Dine Brands and AlphaVest Acquisition

The main advantage of trading using opposite Dine Brands and AlphaVest Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands 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 Dine Brands Global 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..