Correlation Between Biome Technologies and Moonpig Group
Can any of the company-specific risk be diversified away by investing in both Biome Technologies and Moonpig Group 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 Biome Technologies and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biome Technologies Plc and Moonpig Group PLC, you can compare the effects of market volatilities on Biome Technologies and Moonpig Group 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 Biome Technologies with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biome Technologies and Moonpig Group.
Diversification Opportunities for Biome Technologies and Moonpig Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Biome and Moonpig is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Biome Technologies Plc and Moonpig Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonpig Group PLC and Biome Technologies 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 Biome Technologies Plc are associated (or correlated) with Moonpig Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonpig Group PLC has no effect on the direction of Biome Technologies i.e., Biome Technologies and Moonpig Group go up and down completely randomly.
Pair Corralation between Biome Technologies and Moonpig Group
Assuming the 90 days trading horizon Biome Technologies Plc is expected to under-perform the Moonpig Group. In addition to that, Biome Technologies is 1.06 times more volatile than Moonpig Group PLC. It trades about -0.42 of its total potential returns per unit of risk. Moonpig Group PLC is currently generating about -0.25 per unit of volatility. If you would invest 22,650 in Moonpig Group PLC on October 12, 2024 and sell it today you would lose (2,300) from holding Moonpig Group PLC or give up 10.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Biome Technologies Plc vs. Moonpig Group PLC
Performance |
| Timeline |
| Biome Technologies Plc |
| Moonpig Group PLC |
Biome Technologies and Moonpig Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biome Technologies and Moonpig Group
The main advantage of trading using opposite Biome Technologies and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biome Technologies position performs unexpectedly, Moonpig Group 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 Moonpig Group will offset losses from the drop in Moonpig Group's long position.| Biome Technologies vs. Cairo Communication SpA | Biome Technologies vs. Zegona Communications Plc | Biome Technologies vs. Batm Advanced Communications | Biome Technologies vs. Aeorema Communications Plc |
| Moonpig Group vs. Infrastrutture Wireless Italiane | Moonpig Group vs. Zoom Video Communications | Moonpig Group vs. Ecclesiastical Insurance Office | Moonpig Group vs. Zegona Communications Plc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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