Correlation Between Accretion Acquisition and Mountain

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

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

Diversification Opportunities for Accretion Acquisition and Mountain

0.34

Correlation Coefficient

Accretion Acquisition  Mountain

Weak diversification

The 3 months correlation between Accretion and Mountain is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Accretion Acquisition Corp and Mountain Co I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Co I and Accretion 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 Accretion Acquisition Corp are associated (or correlated) with Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Co I has no effect on the direction of Accretion Acquisition i.e., Accretion Acquisition and Mountain go up and down completely randomly.

Pair Corralation between Accretion Acquisition and Mountain

If you would invest  1.24  in Mountain Co I on September 15, 2024 and sell it today you would lose (0.20) from holding Mountain Co I or give up 16.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	7.69%
Values	Daily Returns

Accretion Acquisition Corp  vs.  Mountain Co I

Accretion Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accretion Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Accretion Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Mountain Co I

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Mountain Co I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Mountain showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accretion Acquisition and Mountain

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

The idea behind Accretion Acquisition Corp and Mountain Co I 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.