Correlation Between Mountain Crest and Chain Bridge

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

Diversification Opportunities for Mountain Crest and Chain Bridge

0.71

Correlation Coefficient

Mountain Crest  Chain Bridge

Poor diversification

The 3 months correlation between Mountain and Chain is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition and Chain Bridge I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chain Bridge I 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 Chain Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chain Bridge I has no effect on the direction of Mountain Crest i.e., Mountain Crest and Chain Bridge go up and down completely randomly.

Pair Corralation between Mountain Crest and Chain Bridge

If you would invest  1,091  in Chain Bridge I on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Chain Bridge I or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Mountain Crest Acquisition  vs.  Chain Bridge I

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. Despite nearly stable basic indicators, Mountain Crest is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Chain Bridge I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chain Bridge I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mountain Crest and Chain Bridge

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

The idea behind Mountain Crest Acquisition and Chain Bridge I 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.