Correlation Between Johnson Matthey and Moonpig Group
Can any of the company-specific risk be diversified away by investing in both Johnson Matthey 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 Johnson Matthey and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Matthey PLC and Moonpig Group PLC, you can compare the effects of market volatilities on Johnson Matthey 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 Johnson Matthey with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Matthey and Moonpig Group.
Diversification Opportunities for Johnson Matthey and Moonpig Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Johnson and Moonpig is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Matthey 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 Johnson Matthey 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 Johnson Matthey 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 Johnson Matthey i.e., Johnson Matthey and Moonpig Group go up and down completely randomly.
Pair Corralation between Johnson Matthey and Moonpig Group
Assuming the 90 days trading horizon Johnson Matthey PLC is expected to under-perform the Moonpig Group. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Matthey PLC is 1.53 times less risky than Moonpig Group. The stock trades about -0.04 of its potential returns per unit of risk. The Moonpig Group PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,350 in Moonpig Group PLC on September 24, 2024 and sell it today you would earn a total of 10,750 from holding Moonpig Group PLC or generate 94.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Johnson Matthey PLC vs. Moonpig Group PLC
Performance |
| Timeline |
| Johnson Matthey PLC |
| Moonpig Group PLC |
Johnson Matthey and Moonpig Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Matthey and Moonpig Group
The main advantage of trading using opposite Johnson Matthey and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Matthey 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.| Johnson Matthey vs. Givaudan SA | Johnson Matthey vs. Antofagasta PLC | Johnson Matthey vs. Ferrexpo PLC | Johnson Matthey vs. Atalaya Mining |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |