Correlation Between Tastemaker Acquisition and Monterey Capital

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

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

Diversification Opportunities for Tastemaker Acquisition and Monterey Capital

-0.12

Correlation Coefficient

Tastemaker Acquisition  Monterey Capital

Good diversification

The 3 months correlation between Tastemaker and Monterey is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tastemaker Acquisition Corp 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 Tastemaker 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 Tastemaker Acquisition Corp 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 Tastemaker Acquisition i.e., Tastemaker Acquisition and Monterey Capital go up and down completely randomly.

Pair Corralation between Tastemaker Acquisition and Monterey Capital

If you would invest  1.01  in Monterey Capital Acquisition on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Monterey Capital Acquisition or generate 0.0% return on investment over 90 days.

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

Tastemaker Acquisition Corp  vs.  Monterey Capital Acquisition

Tastemaker Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 Tastemaker Acquisition and Monterey Capital

The main advantage of trading using opposite Tastemaker Acquisition and Monterey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tastemaker Acquisition 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 Tastemaker Acquisition Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.