Correlation Between Mountain Lake and Cartesian Growth

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

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

Diversification Opportunities for Mountain Lake and Cartesian Growth

0.05

Correlation Coefficient

Mountain Lake  Cartesian Growth

Significant diversification

The 3 months correlation between Mountain and Cartesian is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Lake Acquisition and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth and Mountain Lake 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 Lake Acquisition are associated (or correlated) with Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of Mountain Lake i.e., Mountain Lake and Cartesian Growth go up and down completely randomly.

Pair Corralation between Mountain Lake and Cartesian Growth

Assuming the 90 days horizon Mountain Lake is expected to generate 236.0 times less return on investment than Cartesian Growth. But when comparing it to its historical volatility, Mountain Lake Acquisition is 2.21 times less risky than Cartesian Growth. It trades about 0.0 of its potential returns per unit of risk. Cartesian Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,001  in Cartesian Growth on May 3, 2025 and sell it today you would earn a total of  29.00  from holding Cartesian Growth or generate 2.9% return on investment over 90 days.

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

Mountain Lake Acquisition  vs.  Cartesian Growth

Mountain Lake Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mountain Lake Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Mountain Lake is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Cartesian Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cartesian Growth are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cartesian Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mountain Lake and Cartesian Growth

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

The idea behind Mountain Lake Acquisition and Cartesian Growth 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.