Correlation Between Mountain Crest and Great Eagle

Can any of the company-specific risk be diversified away by investing in both Mountain Crest and Great Eagle 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 Great Eagle 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 Great Eagle Holdings, you can compare the effects of market volatilities on Mountain Crest and Great Eagle 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 Great Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and Great Eagle.

Diversification Opportunities for Mountain Crest and Great Eagle

-0.78

Correlation Coefficient

Mountain Crest  Great Eagle

Pay attention - limited upside

The 3 months correlation between Mountain and Great is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Great Eagle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Eagle Holdings 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 Great Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Eagle Holdings has no effect on the direction of Mountain Crest i.e., Mountain Crest and Great Eagle go up and down completely randomly.

Pair Corralation between Mountain Crest and Great Eagle

If you would invest  149.00  in Great Eagle Holdings on March 7, 2024 and sell it today you would earn a total of  4.00  from holding Great Eagle Holdings or generate 2.68% 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.  Great Eagle Holdings

Mountain Crest Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mountain Crest Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Mountain Crest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Great Eagle Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great Eagle Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Great Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mountain Crest and Great Eagle

The main advantage of trading using opposite Mountain Crest and Great Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest position performs unexpectedly, Great Eagle 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 Great Eagle will offset losses from the drop in Great Eagle's long position.

The idea behind Mountain Crest Acquisition and Great Eagle Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.