Correlation Between Altimar Acquisition and Deep Medicine

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

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

Diversification Opportunities for Altimar Acquisition and Deep Medicine

0.09

Correlation Coefficient

Altimar Acquisition  Deep Medicine

Significant diversification

The 3 months correlation between Altimar and Deep is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Altimar Acquisition Corp and Deep Medicine Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deep Medicine Acquisition and Altimar 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 Altimar Acquisition Corp are associated (or correlated) with Deep Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deep Medicine Acquisition has no effect on the direction of Altimar Acquisition i.e., Altimar Acquisition and Deep Medicine go up and down completely randomly.

Pair Corralation between Altimar Acquisition and Deep Medicine

Assuming the 90 days horizon Altimar Acquisition Corp is expected to generate 203.71 times more return on investment than Deep Medicine. However, Altimar Acquisition is 203.71 times more volatile than Deep Medicine Acquisition. It trades about 0.4 of its potential returns per unit of risk. Deep Medicine Acquisition is currently generating about 0.07 per unit of risk. If you would invest  0.50  in Altimar Acquisition Corp on September 4, 2024 and sell it today you would earn a total of  4.50  from holding Altimar Acquisition Corp or generate 900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	17.11%
Values	Daily Returns

Altimar Acquisition Corp  vs.  Deep Medicine Acquisition

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Deep Medicine Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deep Medicine Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Deep Medicine is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Altimar Acquisition and Deep Medicine

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

The idea behind Altimar Acquisition Corp and Deep Medicine 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.