Correlation Between Mountain Crest and Federal National
Can any of the company-specific risk be diversified away by investing in both Mountain Crest and Federal National 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 Federal National 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 Federal National Mortgage, you can compare the effects of market volatilities on Mountain Crest and Federal National 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 Federal National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and Federal National.
Diversification Opportunities for Mountain Crest and Federal National
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mountain and Federal is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Federal National Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal National Mortgage 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 Federal National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal National Mortgage has no effect on the direction of Mountain Crest i.e., Mountain Crest and Federal National go up and down completely randomly.
Pair Corralation between Mountain Crest and Federal National
Given the investment horizon of 90 days Mountain Crest Acquisition is expected to under-perform the Federal National. In addition to that, Mountain Crest is 3.4 times more volatile than Federal National Mortgage. It trades about -0.2 of its total potential returns per unit of risk. Federal National Mortgage is currently generating about 0.07 per unit of volatility. If you would invest 420.00 in Federal National Mortgage on September 2, 2024 and sell it today you would earn a total of 1,180 from holding Federal National Mortgage or generate 280.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 12.3% |
| Values | Daily Returns |
Mountain Crest Acquisition vs. Federal National Mortgage
Performance |
| Timeline |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Federal National Mortgage |
Mountain Crest and Federal National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mountain Crest and Federal National
The main advantage of trading using opposite Mountain Crest and Federal National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest position performs unexpectedly, Federal National 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 Federal National will offset losses from the drop in Federal National's long position.| Mountain Crest vs. Ecovyst | Mountain Crest vs. Sensient Technologies | Mountain Crest vs. Sealed Air | Mountain Crest vs. Air Products and |
| Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal National Mortgage |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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