Correlation Between Mountain Crest and Chow Tai
Can any of the company-specific risk be diversified away by investing in both Mountain Crest and Chow Tai 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 Chow Tai 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 Chow Tai Fook, you can compare the effects of market volatilities on Mountain Crest and Chow Tai 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 Chow Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and Chow Tai.
Diversification Opportunities for Mountain Crest and Chow Tai
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mountain and Chow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Chow Tai Fook in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chow Tai Fook 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 Chow Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chow Tai Fook has no effect on the direction of Mountain Crest i.e., Mountain Crest and Chow Tai go up and down completely randomly.
Pair Corralation between Mountain Crest and Chow Tai
If you would invest (100.00) in Mountain Crest Acquisition on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Mountain Crest Acquisition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mountain Crest Acquisition vs. Chow Tai Fook
Performance |
| Timeline |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chow Tai Fook |
Mountain Crest and Chow Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mountain Crest and Chow Tai
The main advantage of trading using opposite Mountain Crest and Chow Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest position performs unexpectedly, Chow Tai 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 Chow Tai will offset losses from the drop in Chow Tai's long position.| Mountain Crest vs. Weyco Group | Mountain Crest vs. Pool Corporation | Mountain Crest vs. Sea | Mountain Crest vs. Mid Atlantic Home Health |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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