Correlation Between Mill City and FTAC Emerald

Can any of the company-specific risk be diversified away by investing in both Mill City and FTAC Emerald 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 Mill City and FTAC Emerald into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mill City Ventures and FTAC Emerald Acquisition, you can compare the effects of market volatilities on Mill City and FTAC Emerald 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 Mill City with a short position of FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and FTAC Emerald.

Diversification Opportunities for Mill City and FTAC Emerald

-0.44

Correlation Coefficient

Mill City  FTAC Emerald

Very good diversification

The 3 months correlation between Mill and FTAC is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and FTAC Emerald Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAC Emerald Acquisition and Mill City 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 Mill City Ventures are associated (or correlated) with FTAC Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAC Emerald Acquisition has no effect on the direction of Mill City i.e., Mill City and FTAC Emerald go up and down completely randomly.

Pair Corralation between Mill City and FTAC Emerald

Given the investment horizon of 90 days Mill City Ventures is expected to generate 206.64 times more return on investment than FTAC Emerald. However, Mill City is 206.64 times more volatile than FTAC Emerald Acquisition. It trades about 0.06 of its potential returns per unit of risk. FTAC Emerald Acquisition is currently generating about 0.06 per unit of risk. If you would invest  240.00  in Mill City Ventures on September 29, 2024 and sell it today you would lose (44.00) from holding Mill City Ventures or give up 18.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.51%
Values	Daily Returns

Mill City Ventures  vs.  FTAC Emerald Acquisition

Mill City Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

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

FTAC Emerald Acquisition

Risk-Adjusted Performance

0 of 100

Modest

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

Pair Trading with Mill City and FTAC Emerald

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

The idea behind Mill City Ventures and FTAC Emerald 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.