Correlation Between OCA Acquisition and Athena Technology

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

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

Diversification Opportunities for OCA Acquisition and Athena Technology

-0.15

Correlation Coefficient

OCA Acquisition  Athena Technology

Good diversification

The 3 months correlation between OCA and Athena is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding OCA Acquisition Corp and Athena Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athena Technology and OCA 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 OCA Acquisition Corp are associated (or correlated) with Athena Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athena Technology has no effect on the direction of OCA Acquisition i.e., OCA Acquisition and Athena Technology go up and down completely randomly.

Pair Corralation between OCA Acquisition and Athena Technology

Given the investment horizon of 90 days OCA Acquisition Corp is expected to generate 0.09 times more return on investment than Athena Technology. However, OCA Acquisition Corp is 10.65 times less risky than Athena Technology. It trades about 0.05 of its potential returns per unit of risk. Athena Technology Acquisition is currently generating about -0.04 per unit of risk. If you would invest  1,026  in OCA Acquisition Corp on September 21, 2024 and sell it today you would earn a total of  84.00  from holding OCA Acquisition Corp or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.99%
Values	Daily Returns

OCA Acquisition Corp  vs.  Athena Technology Acquisition

OCA Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCA Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, OCA Acquisition is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Athena Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athena Technology Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with OCA Acquisition and Athena Technology

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

The idea behind OCA Acquisition Corp and Athena Technology Acquisition 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.