Correlation Between GEN Restaurant and AlphaTime Acquisition

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

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

Diversification Opportunities for GEN Restaurant and AlphaTime Acquisition

-0.23

Correlation Coefficient

GEN Restaurant  AlphaTime Acquisition

Very good diversification

The 3 months correlation between GEN and AlphaTime is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between GEN Restaurant and AlphaTime Acquisition

Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the AlphaTime Acquisition. In addition to that, GEN Restaurant is 29.59 times more volatile than AlphaTime Acquisition Corp. It trades about -0.14 of its total potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about -0.28 per unit of volatility. If you would invest  1,138  in AlphaTime Acquisition Corp on October 11, 2024 and sell it today you would lose (6.00) from holding AlphaTime Acquisition Corp or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

GEN Restaurant Group,  vs.  AlphaTime Acquisition Corp

GEN Restaurant Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, GEN Restaurant is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

AlphaTime Acquisition

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaTime Acquisition Corp are ranked lower than 6 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GEN Restaurant and AlphaTime Acquisition

The main advantage of trading using opposite GEN Restaurant and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant 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 GEN Restaurant Group, 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.