Correlation Between Helios Towers and Moonpig Group
Can any of the company-specific risk be diversified away by investing in both Helios Towers 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 Helios Towers and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Towers Plc and Moonpig Group PLC, you can compare the effects of market volatilities on Helios Towers 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 Helios Towers with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Towers and Moonpig Group.
Diversification Opportunities for Helios Towers and Moonpig Group
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Helios and Moonpig is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Helios Towers 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 Helios Towers 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 Helios Towers 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 Helios Towers i.e., Helios Towers and Moonpig Group go up and down completely randomly.
Pair Corralation between Helios Towers and Moonpig Group
Assuming the 90 days trading horizon Helios Towers Plc is expected to under-perform the Moonpig Group. But the stock apears to be less risky and, when comparing its historical volatility, Helios Towers Plc is 1.42 times less risky than Moonpig Group. The stock trades about -0.23 of its potential returns per unit of risk. The Moonpig Group PLC is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 24,650 in Moonpig Group PLC on September 24, 2024 and sell it today you would lose (2,550) from holding Moonpig Group PLC or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helios Towers Plc vs. Moonpig Group PLC
Performance |
| Timeline |
| Helios Towers Plc |
| Moonpig Group PLC |
Helios Towers and Moonpig Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Towers and Moonpig Group
The main advantage of trading using opposite Helios Towers and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Towers 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.| Helios Towers vs. Chocoladefabriken Lindt Spruengli | Helios Towers vs. Rockwood Realisation PLC | Helios Towers vs. Toyota Motor Corp | Helios Towers vs. Johnson Matthey PLC |
| Moonpig Group vs. Chocoladefabriken Lindt Spruengli | Moonpig Group vs. Rockwood Realisation PLC | Moonpig Group vs. Toyota Motor Corp | Moonpig Group vs. Johnson Matthey 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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