Correlation Between Mountain Crest and Puxin

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

Diversification Opportunities for Mountain Crest and Puxin

-0.34

Correlation Coefficient

Mountain Crest  Puxin

Very good diversification

The 3 months correlation between Mountain and Puxin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Puxin Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puxin Limited 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 Puxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puxin Limited has no effect on the direction of Mountain Crest i.e., Mountain Crest and Puxin go up and down completely randomly.

Pair Corralation between Mountain Crest and Puxin

If you would invest  1.70  in Puxin Limited on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Puxin Limited 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.  Puxin Limited

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Puxin Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mountain Crest and Puxin

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

The idea behind Mountain Crest Acquisition and Puxin Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.