Correlation Between St Galler and Monks Investment
Can any of the company-specific risk be diversified away by investing in both St Galler and Monks Investment 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 St Galler and Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and Monks Investment Trust, you can compare the effects of market volatilities on St Galler and Monks Investment 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 St Galler with a short position of Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Monks Investment.
Diversification Opportunities for St Galler and Monks Investment
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0QQZ and Monks is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust and St Galler 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 St Galler Kantonalbank are associated (or correlated) with Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of St Galler i.e., St Galler and Monks Investment go up and down completely randomly.
Pair Corralation between St Galler and Monks Investment
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to under-perform the Monks Investment. But the stock apears to be less risky and, when comparing its historical volatility, St Galler Kantonalbank is 1.31 times less risky than Monks Investment. The stock trades about -0.04 of its potential returns per unit of risk. The Monks Investment Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 99,696 in Monks Investment Trust on September 2, 2024 and sell it today you would earn a total of 27,304 from holding Monks Investment Trust or generate 27.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Monks Investment Trust
Performance |
| Timeline |
| St Galler Kantonalbank |
| Monks Investment Trust |
St Galler and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Monks Investment
The main advantage of trading using opposite St Galler and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment's long position.| St Galler vs. Uniper SE | St Galler vs. Mulberry Group PLC | St Galler vs. London Security Plc | St Galler vs. Triad Group PLC |
| Monks Investment vs. Sealed Air Corp | Monks Investment vs. Schweiter Technologies AG | Monks Investment vs. Bloomsbury Publishing Plc | Monks Investment vs. Check Point Software |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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