Correlation Between Mars Acquisition and Mountain I

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

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

Diversification Opportunities for Mars Acquisition and Mountain I

0.54

Correlation Coefficient

Mars Acquisition  Mountain I

Very weak diversification

The 3 months correlation between Mars and Mountain is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mars Acquisition Corp and Mountain I Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain I Acquisition and Mars 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 Mars Acquisition Corp are associated (or correlated) with Mountain I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain I Acquisition has no effect on the direction of Mars Acquisition i.e., Mars Acquisition and Mountain I go up and down completely randomly.

Pair Corralation between Mars Acquisition and Mountain I

Assuming the 90 days horizon Mars Acquisition Corp is expected to under-perform the Mountain I. In addition to that, Mars Acquisition is 15.74 times more volatile than Mountain I Acquisition. It trades about -0.04 of its total potential returns per unit of risk. Mountain I Acquisition is currently generating about 0.03 per unit of volatility. If you would invest  1,122  in Mountain I Acquisition on September 28, 2024 and sell it today you would earn a total of  17.00  from holding Mountain I Acquisition or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.81%
Values	Daily Returns

Mars Acquisition Corp  vs.  Mountain I Acquisition

Mars Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mars Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mountain I Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mountain I Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mountain I is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mars Acquisition and Mountain I

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

The idea behind Mars Acquisition Corp and Mountain I 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.