Correlation Between Sligro Food and AlphaTime Acquisition

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

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

Diversification Opportunities for Sligro Food and AlphaTime Acquisition

-0.42

Correlation Coefficient

Sligro Food  AlphaTime Acquisition

Very good diversification

The 3 months correlation between Sligro and AlphaTime is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food 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 Sligro Food 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 Sligro Food 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 Sligro Food i.e., Sligro Food and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between Sligro Food and AlphaTime Acquisition

Assuming the 90 days horizon Sligro Food Group is expected to under-perform the AlphaTime Acquisition. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 6.56 times less risky than AlphaTime Acquisition. The pink sheet trades about -0.07 of its potential returns per unit of risk. The AlphaTime Acquisition Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  16.00  in AlphaTime Acquisition Corp on September 14, 2024 and sell it today you would earn a total of  0.58  from holding AlphaTime Acquisition Corp or generate 3.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	54.69%
Values	Daily Returns

Sligro Food Group  vs.  AlphaTime Acquisition Corp

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AlphaTime Acquisition

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days AlphaTime Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile fundamental indicators, AlphaTime Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sligro Food and AlphaTime Acquisition

The main advantage of trading using opposite Sligro Food and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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 Sligro Food 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.