Correlation Between Altus Power and OCA Acquisition

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Can any of the company-specific risk be diversified away by investing in both Altus Power and OCA 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 Altus Power and OCA Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Power and OCA Acquisition Corp, you can compare the effects of market volatilities on Altus Power and OCA 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 Altus Power with a short position of OCA Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and OCA Acquisition.

Diversification Opportunities for Altus Power and OCA Acquisition

-0.87
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Altus and OCA Acquisition is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and OCA Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCA Acquisition Corp and Altus Power 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 Altus Power are associated (or correlated) with OCA Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCA Acquisition Corp has no effect on the direction of Altus Power i.e., Altus Power and OCA Acquisition go up and down completely randomly.

Pair Corralation between Altus Power and OCA Acquisition

Given the investment horizon of 90 days Altus Power is expected to under-perform the OCA Acquisition. In addition to that, Altus Power is 37.76 times more volatile than OCA Acquisition Corp. It trades about -0.21 of its total potential returns per unit of risk. OCA Acquisition Corp is currently generating about 0.21 per unit of volatility. If you would invest  1,013  in OCA Acquisition Corp on September 3, 2022 and sell it today you would earn a total of  7.00  from holding OCA Acquisition Corp or generate 0.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Altus Power  vs.  OCA Acquisition Corp

 Performance (%) 
       Timeline  
Altus Power 
Altus Performance
0 of 100
Over the last 90 days Altus Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Altus Price Channel

OCA Acquisition Corp 
OCA Acquisition Performance
19 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in OCA Acquisition Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, OCA Acquisition is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

OCA Acquisition Price Channel

Altus Power and OCA Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altus Power and OCA Acquisition

The main advantage of trading using opposite Altus Power and OCA Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, OCA 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 OCA Acquisition will offset losses from the drop in OCA Acquisition's long position.
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The idea behind Altus Power and OCA 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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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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