Correlation Between Canada Goose and Mountain Crest

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

Diversification Opportunities for Canada Goose and Mountain Crest

CanadaMountainDiversified AwayCanadaMountainDiversified Away100%
0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Canada and Mountain is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Mountain Crest Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Crest Acqui and Canada Goose 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 Canada Goose Holdings are associated (or correlated) with Mountain Crest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Crest Acqui has no effect on the direction of Canada Goose i.e., Canada Goose and Mountain Crest go up and down completely randomly.

Pair Corralation between Canada Goose and Mountain Crest

If you would invest (100.00) in Mountain Crest Acquisition on September 25, 2024 and sell it today you would earn a total of  100.00  from holding Mountain Crest Acquisition or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Canada Goose Holdings  vs.  Mountain Crest Acquisition

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030
JavaScript chart by amCharts 3.21.15GOOS MCAEU
       Timeline  
Canada Goose Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Canada Goose is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.51010.51111.51212.5
Mountain Crest Acqui 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mountain Crest Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Mountain Crest is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Canada Goose and Mountain Crest Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.31-3.23-2.15-1.060.01.072.153.224.3 0.0400.0450.0500.055
JavaScript chart by amCharts 3.21.15GOOS MCAEU
       Returns  

Pair Trading with Canada Goose and Mountain Crest

The main advantage of trading using opposite Canada Goose and Mountain Crest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose position performs unexpectedly, Mountain Crest 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 Crest will offset losses from the drop in Mountain Crest's long position.
The idea behind Canada Goose Holdings and Mountain Crest 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.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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