Correlation Between PureCycle Technologies and Tastemaker Acquisition

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

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

Diversification Opportunities for PureCycle Technologies and Tastemaker Acquisition

0.1

Correlation Coefficient

PureCycle Technologies  Tastemaker Acquisition

Average diversification

The 3 months correlation between PureCycle and Tastemaker is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Tastemaker Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tastemaker Acquisition and PureCycle Technologies 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 PureCycle Technologies are associated (or correlated) with Tastemaker Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tastemaker Acquisition has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Tastemaker Acquisition go up and down completely randomly.

Pair Corralation between PureCycle Technologies and Tastemaker Acquisition

Assuming the 90 days horizon PureCycle Technologies is expected to generate 2.16 times more return on investment than Tastemaker Acquisition. However, PureCycle Technologies is 2.16 times more volatile than Tastemaker Acquisition Corp. It trades about 0.05 of its potential returns per unit of risk. Tastemaker Acquisition Corp is currently generating about 0.05 per unit of risk. If you would invest  345.00  in PureCycle Technologies on October 22, 2024 and sell it today you would lose (35.00) from holding PureCycle Technologies or give up 10.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	20.54%
Values	Daily Returns

PureCycle Technologies  vs.  Tastemaker Acquisition Corp

PureCycle Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PureCycle Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PureCycle Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tastemaker Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PureCycle Technologies and Tastemaker Acquisition

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

The idea behind PureCycle Technologies and Tastemaker 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.