Correlation Between MYT Netherlands and AlphaTime Acquisition

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

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

Diversification Opportunities for MYT Netherlands and AlphaTime Acquisition

0.65

Correlation Coefficient

MYT Netherlands  AlphaTime Acquisition

Poor diversification

The 3 months correlation between MYT and AlphaTime is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between MYT Netherlands and AlphaTime Acquisition

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 18.23 times more return on investment than AlphaTime Acquisition. However, MYT Netherlands is 18.23 times more volatile than AlphaTime Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest  709.00  in MYT Netherlands Parent on December 20, 2024 and sell it today you would earn a total of  94.00  from holding MYT Netherlands Parent or generate 13.26% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  AlphaTime Acquisition Corp

MYT Netherlands Parent

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

AlphaTime Acquisition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaTime Acquisition Corp are ranked lower than 11 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MYT Netherlands and AlphaTime Acquisition

The main advantage of trading using opposite MYT Netherlands and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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 MYT Netherlands Parent 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..