Correlation Between LuxUrban Hotels and AlphaVest Acquisition

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

By analyzing existing cross correlation between LuxUrban Hotels 1300 and AlphaVest Acquisition Corp, you can compare the effects of market volatilities on LuxUrban Hotels 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 LuxUrban Hotels with a short position of AlphaVest Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of LuxUrban Hotels and AlphaVest Acquisition.

Diversification Opportunities for LuxUrban Hotels and AlphaVest Acquisition

-0.19

Correlation Coefficient

LuxUrban Hotels  AlphaVest Acquisition

Good diversification

The 3 months correlation between LuxUrban and AlphaVest is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding LuxUrban Hotels 1300 and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition and LuxUrban Hotels 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 LuxUrban Hotels 1300 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 LuxUrban Hotels i.e., LuxUrban Hotels and AlphaVest Acquisition go up and down completely randomly.

Pair Corralation between LuxUrban Hotels and AlphaVest Acquisition

Assuming the 90 days horizon LuxUrban Hotels 1300 is expected to under-perform the AlphaVest Acquisition. In addition to that, LuxUrban Hotels is 74.77 times more volatile than AlphaVest Acquisition Corp. It trades about -0.32 of its total potential returns per unit of risk. AlphaVest Acquisition Corp is currently generating about 0.19 per unit of volatility. If you would invest  1,135  in AlphaVest Acquisition Corp on October 26, 2024 and sell it today you would earn a total of  5.00  from holding AlphaVest Acquisition Corp or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.89%
Values	Daily Returns

LuxUrban Hotels 1300  vs.  AlphaVest Acquisition Corp

LuxUrban Hotels 1300

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LuxUrban Hotels 1300 has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Preferred Stock's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

AlphaVest Acquisition

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaVest Acquisition Corp are ranked lower than 19 (%) 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 current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with LuxUrban Hotels and AlphaVest Acquisition

The main advantage of trading using opposite LuxUrban Hotels and AlphaVest Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LuxUrban Hotels 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 LuxUrban Hotels 1300 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.