Correlation Between Moringa Acquisition and Monterey Capital

Can any of the company-specific risk be diversified away by investing in both Moringa Acquisition and Monterey Capital 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 Moringa Acquisition and Monterey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Moringa Acquisition and Monterey Capital

-0.05

Correlation Coefficient

Moringa Acquisition  Monterey Capital

Good diversification

The 3 months correlation between Moringa and Monterey is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Moringa Acquisition Corp and Monterey Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monterey Capital Acq and Moringa Acquisition 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 Moringa Acquisition Corp are associated (or correlated) with Monterey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monterey Capital Acq has no effect on the direction of Moringa Acquisition i.e., Moringa Acquisition and Monterey Capital go up and down completely randomly.

Pair Corralation between Moringa Acquisition and Monterey Capital

Assuming the 90 days horizon Moringa Acquisition Corp is expected to generate 1.4 times more return on investment than Monterey Capital. However, Moringa Acquisition is 1.4 times more volatile than Monterey Capital Acquisition. It trades about 0.12 of its potential returns per unit of risk. Monterey Capital Acquisition is currently generating about 0.1 per unit of risk. If you would invest  14.00  in Moringa Acquisition Corp on October 10, 2024 and sell it today you would lose (14.00) from holding Moringa Acquisition Corp or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.67%
Values	Daily Returns

Moringa Acquisition Corp  vs.  Monterey Capital Acquisition

Moringa Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Monterey Capital Acq

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Moringa Acquisition and Monterey Capital

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

The idea behind Moringa Acquisition Corp and Monterey Capital Acquisition 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.