Correlation Between Welsbach Technology and Altimar Acquisition

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

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

Diversification Opportunities for Welsbach Technology and Altimar Acquisition

0.33

Correlation Coefficient

Welsbach Technology  Altimar Acquisition

Weak diversification

The 3 months correlation between Welsbach and Altimar is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Welsbach Technology Metals and Altimar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altimar Acquisition Corp and Welsbach Technology 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 Welsbach Technology Metals are associated (or correlated) with Altimar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altimar Acquisition Corp has no effect on the direction of Welsbach Technology i.e., Welsbach Technology and Altimar Acquisition go up and down completely randomly.

Pair Corralation between Welsbach Technology and Altimar Acquisition

Given the investment horizon of 90 days Welsbach Technology is expected to generate 2253.91 times less return on investment than Altimar Acquisition. But when comparing it to its historical volatility, Welsbach Technology Metals is 378.01 times less risky than Altimar Acquisition. It trades about 0.06 of its potential returns per unit of risk. Altimar Acquisition Corp is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Altimar Acquisition Corp on September 21, 2024 and sell it today you would earn a total of  4.90  from holding Altimar Acquisition Corp or generate 4900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.44%
Values	Daily Returns

Welsbach Technology Metals  vs.  Altimar Acquisition Corp

Welsbach Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Welsbach Technology Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal primary indicators, Welsbach Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Altimar Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altimar Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altimar Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Welsbach Technology and Altimar Acquisition

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

The idea behind Welsbach Technology Metals and Altimar 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.