Correlation Between Microvast Holdings and Monterey Capital

Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and Monterey Capital 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 Microvast Holdings and Monterey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Microvast Holdings and Monterey Capital

0.56

Correlation Coefficient

Microvast Holdings  Monterey Capital

Very weak diversification

The 3 months correlation between Microvast and Monterey is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Monterey Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monterey Capital Acq and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with Monterey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monterey Capital Acq has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Monterey Capital go up and down completely randomly.

Pair Corralation between Microvast Holdings and Monterey Capital

If you would invest  2.40  in Microvast Holdings on September 18, 2024 and sell it today you would earn a total of  12.60  from holding Microvast Holdings or generate 525.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

Microvast Holdings  vs.  Monterey Capital Acquisition

Microvast Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microvast Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Microvast Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Monterey Capital Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monterey Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Monterey Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Microvast Holdings and Monterey Capital

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

The idea behind Microvast Holdings and Monterey Capital 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.