Correlation Between Vital Farms and AlphaTime Acquisition

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

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

Diversification Opportunities for Vital Farms and AlphaTime Acquisition

-0.64

Correlation Coefficient

Vital Farms  AlphaTime Acquisition

Excellent diversification

The 3 months correlation between Vital and AlphaTime is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vital Farms and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and Vital Farms 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 Vital Farms 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 Vital Farms i.e., Vital Farms and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between Vital Farms and AlphaTime Acquisition

Given the investment horizon of 90 days Vital Farms is expected to under-perform the AlphaTime Acquisition. In addition to that, Vital Farms is 13.78 times more volatile than AlphaTime Acquisition Corp. It trades about -0.12 of its total potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about 0.14 per unit of volatility. If you would invest  1,135  in AlphaTime Acquisition Corp on December 20, 2024 and sell it today you would earn a total of  25.00  from holding AlphaTime Acquisition Corp or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Vital Farms  vs.  AlphaTime Acquisition Corp

Vital Farms

Risk-Adjusted Performance

Very Weak

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

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vital Farms and AlphaTime Acquisition

The main advantage of trading using opposite Vital Farms and AlphaTime Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vital Farms 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 Vital Farms 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .