Correlation Between Mountain Crest and Omnilit Acquisition

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

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

Diversification Opportunities for Mountain Crest and Omnilit Acquisition

0.89

Correlation Coefficient

Mountain Crest  Omnilit Acquisition

Very poor diversification

The 3 months correlation between Mountain and Omnilit is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Omnilit Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnilit Acquisition Corp and Mountain Crest 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 Crest Acquisition are associated (or correlated) with Omnilit Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnilit Acquisition Corp has no effect on the direction of Mountain Crest i.e., Mountain Crest and Omnilit Acquisition go up and down completely randomly.

Pair Corralation between Mountain Crest and Omnilit Acquisition

Given the investment horizon of 90 days Mountain Crest Acquisition is expected to generate 1.61 times more return on investment than Omnilit Acquisition. However, Mountain Crest is 1.61 times more volatile than Omnilit Acquisition Corp. It trades about 0.1 of its potential returns per unit of risk. Omnilit Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest  1,039  in Mountain Crest Acquisition on September 14, 2024 and sell it today you would earn a total of  19.00  from holding Mountain Crest Acquisition or generate 1.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.67%
Values	Daily Returns

Mountain Crest Acquisition  vs.  Omnilit Acquisition Corp

Mountain Crest Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mountain Crest Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mountain Crest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Omnilit Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omnilit Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Omnilit Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mountain Crest and Omnilit Acquisition

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

The idea behind Mountain Crest Acquisition and Omnilit 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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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.