Correlation Between Mountain Crest and A SPAC

Can any of the company-specific risk be diversified away by investing in both Mountain Crest and A SPAC 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 A SPAC 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 A SPAC I, you can compare the effects of market volatilities on Mountain Crest and A SPAC 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 A SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and A SPAC.

Diversification Opportunities for Mountain Crest and A SPAC

0.0

Correlation Coefficient

Mountain Crest  A SPAC

Pay attention - limited upside

The 3 months correlation between Mountain and ASCA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and A SPAC I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC I 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 A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC I has no effect on the direction of Mountain Crest i.e., Mountain Crest and A SPAC go up and down completely randomly.

Pair Corralation between Mountain Crest and A SPAC

If you would invest  1,061  in A SPAC I on September 15, 2024 and sell it today you would earn a total of  0.00  from holding A SPAC I or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mountain Crest Acquisition  vs.  A SPAC I

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. In spite of comparatively stable technical and fundamental indicators, Mountain Crest is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

A SPAC I

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mountain Crest and A SPAC

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

The idea behind Mountain Crest Acquisition and A SPAC 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.