Correlation Between Goldenstone Acquisition and AlphaTime Acquisition

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

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

Diversification Opportunities for Goldenstone Acquisition and AlphaTime Acquisition

-0.59

Correlation Coefficient

Goldenstone Acquisition  AlphaTime Acquisition

Excellent diversification

The 3 months correlation between Goldenstone and AlphaTime is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Goldenstone Acquisition Limite and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and Goldenstone 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 Goldenstone Acquisition Limited 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 Goldenstone Acquisition i.e., Goldenstone Acquisition and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between Goldenstone Acquisition and AlphaTime Acquisition

Assuming the 90 days horizon Goldenstone Acquisition Limited is expected to generate 3.07 times more return on investment than AlphaTime Acquisition. However, Goldenstone Acquisition is 3.07 times more volatile than AlphaTime Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about 0.08 per unit of risk. If you would invest  3.37  in Goldenstone Acquisition Limited on September 13, 2024 and sell it today you would lose (0.67) from holding Goldenstone Acquisition Limited or give up 19.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	45.71%
Values	Daily Returns

Goldenstone Acquisition Limite  vs.  AlphaTime Acquisition Corp

Goldenstone Acquisition

Risk-Adjusted Performance

8 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldenstone Acquisition Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Goldenstone Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

AlphaTime Acquisition

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days AlphaTime Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak fundamental indicators, AlphaTime Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldenstone Acquisition and AlphaTime Acquisition

The main advantage of trading using opposite Goldenstone Acquisition and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldenstone Acquisition 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 Goldenstone Acquisition Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.