Correlation Between VanEck ETF and Mountain Crest
Can any of the company-specific risk be diversified away by investing in both VanEck ETF and Mountain Crest 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 VanEck ETF and Mountain Crest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ETF Trust and Mountain Crest Acquisition, you can compare the effects of market volatilities on VanEck ETF and Mountain Crest 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 VanEck ETF with a short position of Mountain Crest. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ETF and Mountain Crest.
Diversification Opportunities for VanEck ETF and Mountain Crest
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VanEck and Mountain is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ETF Trust and Mountain Crest Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Crest Acqui and VanEck ETF 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 VanEck ETF Trust are associated (or correlated) with Mountain Crest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Crest Acqui has no effect on the direction of VanEck ETF i.e., VanEck ETF and Mountain Crest go up and down completely randomly.
Pair Corralation between VanEck ETF and Mountain Crest
If you would invest 4,294 in VanEck ETF Trust on September 2, 2024 and sell it today you would earn a total of 197.00 from holding VanEck ETF Trust or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
VanEck ETF Trust vs. Mountain Crest Acquisition
Performance |
| Timeline |
| VanEck ETF Trust |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck ETF and Mountain Crest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ETF and Mountain Crest
The main advantage of trading using opposite VanEck ETF and Mountain Crest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ETF position performs unexpectedly, Mountain Crest 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 Mountain Crest will offset losses from the drop in Mountain Crest's long position.The idea behind VanEck ETF Trust and Mountain Crest 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.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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