Correlation Between Crown Proptech and Pontem Corp

Can any of the company-specific risk be diversified away by investing in both Crown Proptech and Pontem Corp 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 Crown Proptech and Pontem Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crown Proptech Acquisitions and Pontem Corp, you can compare the effects of market volatilities on Crown Proptech and Pontem Corp 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 Crown Proptech with a short position of Pontem Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Proptech and Pontem Corp.

Diversification Opportunities for Crown Proptech and Pontem Corp

0.0

Correlation Coefficient

Crown Proptech  Pontem Corp

Pay attention - limited upside

The 3 months correlation between Crown and Pontem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crown Proptech Acquisitions and Pontem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontem Corp and Crown Proptech 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 Crown Proptech Acquisitions are associated (or correlated) with Pontem Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontem Corp has no effect on the direction of Crown Proptech i.e., Crown Proptech and Pontem Corp go up and down completely randomly.

Pair Corralation between Crown Proptech and Pontem Corp

If you would invest (100.00) in Pontem Corp on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Pontem Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Crown Proptech Acquisitions  vs.  Pontem Corp

Crown Proptech Acqui

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Proptech Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, Crown Proptech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pontem Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pontem Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Pontem Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Crown Proptech and Pontem Corp

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

The idea behind Crown Proptech Acquisitions and Pontem Corp 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.