Correlation Between ED Invest and Monnari Trade
Can any of the company-specific risk be diversified away by investing in both ED Invest and Monnari Trade 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 ED Invest and Monnari Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ED Invest SA and Monnari Trade SA, you can compare the effects of market volatilities on ED Invest and Monnari Trade 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 ED Invest with a short position of Monnari Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of ED Invest and Monnari Trade.
Diversification Opportunities for ED Invest and Monnari Trade
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDI and Monnari is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ED Invest SA and Monnari Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monnari Trade SA and ED Invest 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 ED Invest SA are associated (or correlated) with Monnari Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monnari Trade SA has no effect on the direction of ED Invest i.e., ED Invest and Monnari Trade go up and down completely randomly.
Pair Corralation between ED Invest and Monnari Trade
Assuming the 90 days trading horizon ED Invest SA is expected to generate 2.9 times more return on investment than Monnari Trade. However, ED Invest is 2.9 times more volatile than Monnari Trade SA. It trades about 0.06 of its potential returns per unit of risk. Monnari Trade SA is currently generating about 0.01 per unit of risk. If you would invest 273.00 in ED Invest SA on September 5, 2024 and sell it today you would earn a total of 375.00 from holding ED Invest SA or generate 137.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ED Invest SA vs. Monnari Trade SA
Performance |
| Timeline |
| ED Invest SA |
| Monnari Trade SA |
ED Invest and Monnari Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ED Invest and Monnari Trade
The main advantage of trading using opposite ED Invest and Monnari Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ED Invest position performs unexpectedly, Monnari Trade 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 Monnari Trade will offset losses from the drop in Monnari Trade's long position.| ED Invest vs. GreenX Metals | ED Invest vs. SOFTWARE MANSION SPOLKA | ED Invest vs. Quantum Software SA | ED Invest vs. Medicalg |
| Monnari Trade vs. LPP SA | Monnari Trade vs. Esotiq Henderson SA | Monnari Trade vs. Asseco Business Solutions | Monnari Trade vs. Kogeneracja SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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