Correlation Between Frontier Investment and AlphaTime Acquisition

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

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

Diversification Opportunities for Frontier Investment and AlphaTime Acquisition

0.68

Correlation Coefficient

Frontier Investment  AlphaTime Acquisition

Poor diversification

The 3 months correlation between Frontier and AlphaTime is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Investment Corp and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and Frontier Investment 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 Frontier Investment Corp are associated (or correlated) with AlphaTime Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaTime Acquisition has no effect on the direction of Frontier Investment i.e., Frontier Investment and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between Frontier Investment and AlphaTime Acquisition

If you would invest  1,050  in Frontier Investment Corp on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Frontier Investment Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Frontier Investment Corp  vs.  AlphaTime Acquisition Corp

Frontier Investment Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontier Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Frontier Investment is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AlphaTime Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaTime Acquisition Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, AlphaTime Acquisition is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Frontier Investment and AlphaTime Acquisition

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

The idea behind Frontier Investment Corp and AlphaTime 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.