Correlation Between Now and Montfort Capital

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

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

Diversification Opportunities for Now and Montfort Capital

-0.41

Correlation Coefficient

Now  Montfort Capital

Very good diversification

The 3 months correlation between Now and Montfort is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Montfort Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montfort Capital Corp and Now 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 Now Inc are associated (or correlated) with Montfort Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montfort Capital Corp has no effect on the direction of Now i.e., Now and Montfort Capital go up and down completely randomly.

Pair Corralation between Now and Montfort Capital

Given the investment horizon of 90 days Now is expected to generate 371.69 times less return on investment than Montfort Capital. But when comparing it to its historical volatility, Now Inc is 58.73 times less risky than Montfort Capital. It trades about 0.02 of its potential returns per unit of risk. Montfort Capital Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1.94  in Montfort Capital Corp on May 7, 2025 and sell it today you would earn a total of  5.68  from holding Montfort Capital Corp or generate 292.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Now Inc  vs.  Montfort Capital Corp

Now Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Now Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Now is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Montfort Capital Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Montfort Capital Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Montfort Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Now and Montfort Capital

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

The idea behind Now Inc and Montfort Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.