Correlation Between Mountain Crest and AGL Energy
Can any of the company-specific risk be diversified away by investing in both Mountain Crest and AGL Energy 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 AGL Energy 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 AGL Energy Limited, you can compare the effects of market volatilities on Mountain Crest and AGL Energy 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 AGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and AGL Energy.
Diversification Opportunities for Mountain Crest and AGL Energy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mountain and AGL is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and AGL Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGL Energy Limited 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 AGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGL Energy Limited has no effect on the direction of Mountain Crest i.e., Mountain Crest and AGL Energy go up and down completely randomly.
Pair Corralation between Mountain Crest and AGL Energy
If you would invest 610.00 in AGL Energy Limited on September 2, 2024 and sell it today you would earn a total of 95.00 from holding AGL Energy Limited or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mountain Crest Acquisition vs. AGL Energy Limited
Performance |
| Timeline |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mountain Crest and AGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mountain Crest and AGL Energy
The main advantage of trading using opposite Mountain Crest and AGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest position performs unexpectedly, AGL Energy 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 AGL Energy will offset losses from the drop in AGL Energy's long position.| Mountain Crest vs. Ecovyst | Mountain Crest vs. Sensient Technologies | Mountain Crest vs. Sealed Air | Mountain Crest vs. Air Products and |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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