Correlation Between Mosaic and Everest

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

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

Diversification Opportunities for Mosaic and Everest

-0.16

Correlation Coefficient

Mosaic  Everest

Good diversification

The 3 months correlation between Mosaic and Everest is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group and Mosaic 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 The Mosaic are associated (or correlated) with Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of Mosaic i.e., Mosaic and Everest go up and down completely randomly.

Pair Corralation between Mosaic and Everest

Considering the 90-day investment horizon The Mosaic is expected to generate 1.72 times more return on investment than Everest. However, Mosaic is 1.72 times more volatile than Everest Group. It trades about 0.08 of its potential returns per unit of risk. Everest Group is currently generating about 0.07 per unit of risk. If you would invest  2,406  in The Mosaic on December 18, 2024 and sell it today you would earn a total of  247.00  from holding The Mosaic or generate 10.27% return on investment over 90 days.

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

The Mosaic  vs.  Everest Group

Mosaic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Everest Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Everest Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mosaic and Everest

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

The idea behind The Mosaic and Everest Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.