Correlation Between Everest Consolidator and Pontem Corp

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

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

Diversification Opportunities for Everest Consolidator and Pontem Corp

0.36

Correlation Coefficient

Everest Consolidator  Pontem Corp

Weak diversification

The 3 months correlation between Everest and Pontem is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Everest Consolidator Acquisiti and Pontem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontem Corp and Everest Consolidator 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 Everest Consolidator Acquisition 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 Everest Consolidator i.e., Everest Consolidator and Pontem Corp go up and down completely randomly.

Pair Corralation between Everest Consolidator and Pontem Corp

If you would invest  1,138  in Everest Consolidator Acquisition on October 24, 2024 and sell it today you would earn a total of  61.00  from holding Everest Consolidator Acquisition or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	3.45%
Values	Daily Returns

Everest Consolidator Acquisiti  vs.  Pontem Corp

Everest Consolidator

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Everest Consolidator Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Everest Consolidator may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pontem Corp

Risk-Adjusted Performance

0 of 100

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 Everest Consolidator and Pontem Corp

The main advantage of trading using opposite Everest Consolidator and Pontem Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest Consolidator 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 Everest Consolidator Acquisition 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.