Correlation Between ESH Acquisition and New Mountain
Can any of the company-specific risk be diversified away by investing in both ESH Acquisition and New Mountain 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 ESH Acquisition and New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESH Acquisition Corp and New Mountain Finance, you can compare the effects of market volatilities on ESH Acquisition and New Mountain 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 ESH Acquisition with a short position of New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESH Acquisition and New Mountain.
Diversification Opportunities for ESH Acquisition and New Mountain
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ESH and New is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ESH Acquisition Corp and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance and ESH 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 ESH Acquisition Corp are associated (or correlated) with New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of ESH Acquisition i.e., ESH Acquisition and New Mountain go up and down completely randomly.
Pair Corralation between ESH Acquisition and New Mountain
If you would invest 1,127 in New Mountain Finance on November 18, 2024 and sell it today you would earn a total of 66.00 from holding New Mountain Finance or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESH Acquisition Corp vs. New Mountain Finance
Performance |
| Timeline |
| ESH Acquisition Corp |
| New Mountain Finance |
ESH Acquisition and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESH Acquisition and New Mountain
The main advantage of trading using opposite ESH Acquisition and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESH Acquisition position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain's long position.| ESH Acquisition vs. NetSol Technologies | ESH Acquisition vs. International Consolidated Airlines | ESH Acquisition vs. Cheche Group Class | ESH Acquisition vs. Definitive Healthcare Corp |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse Finance |
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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