Correlation Between Mountain I and Israel Acquisitions

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

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

Diversification Opportunities for Mountain I and Israel Acquisitions

-0.15

Correlation Coefficient

Mountain I  Israel Acquisitions

Good diversification

The 3 months correlation between Mountain and Israel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mountain I Acquisition and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp and Mountain I 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 Mountain I Acquisition are associated (or correlated) with Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Mountain I i.e., Mountain I and Israel Acquisitions go up and down completely randomly.

Pair Corralation between Mountain I and Israel Acquisitions

Given the investment horizon of 90 days Mountain I Acquisition is expected to under-perform the Israel Acquisitions. In addition to that, Mountain I is 2.42 times more volatile than Israel Acquisitions Corp. It trades about -0.19 of its total potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.12 per unit of volatility. If you would invest  1,120  in Israel Acquisitions Corp on September 28, 2024 and sell it today you would earn a total of  15.00  from holding Israel Acquisitions Corp or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.61%
Values	Daily Returns

Mountain I Acquisition  vs.  Israel Acquisitions Corp

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.

Israel Acquisitions Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Acquisitions Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Israel Acquisitions is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Mountain I and Israel Acquisitions

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

The idea behind Mountain I Acquisition and Israel Acquisitions 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.