Correlation Between Mountain Crest and NewHold Investment
Can any of the company-specific risk be diversified away by investing in both Mountain Crest and NewHold Investment 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 NewHold Investment 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 NewHold Investment Corp, you can compare the effects of market volatilities on Mountain Crest and NewHold Investment 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 NewHold Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and NewHold Investment.
Diversification Opportunities for Mountain Crest and NewHold Investment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mountain and NewHold is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and NewHold Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewHold Investment Corp 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 NewHold Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewHold Investment Corp has no effect on the direction of Mountain Crest i.e., Mountain Crest and NewHold Investment go up and down completely randomly.
Pair Corralation between Mountain Crest and NewHold Investment
If you would invest 1.30 in NewHold Investment Corp on August 26, 2024 and sell it today you would earn a total of 0.00 from holding NewHold Investment Corp or generate 0.0% 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. NewHold Investment Corp
Performance |
| Timeline |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NewHold Investment Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mountain Crest and NewHold Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mountain Crest and NewHold Investment
The main advantage of trading using opposite Mountain Crest and NewHold Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest position performs unexpectedly, NewHold Investment 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 NewHold Investment will offset losses from the drop in NewHold Investment's long position.| Mountain Crest vs. Hawkins | Mountain Crest vs. Luxfer Holdings PLC | Mountain Crest vs. Axalta Coating Systems | Mountain Crest vs. Mativ Holdings |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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