Correlation Between Monument Mining and Leons Furniture
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Leons Furniture 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 Monument Mining and Leons Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and Leons Furniture Limited, you can compare the effects of market volatilities on Monument Mining and Leons Furniture 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 Monument Mining with a short position of Leons Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Leons Furniture.
Diversification Opportunities for Monument Mining and Leons Furniture
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monument and Leons is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Leons Furniture Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leons Furniture and Monument Mining 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 Monument Mining Limited are associated (or correlated) with Leons Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leons Furniture has no effect on the direction of Monument Mining i.e., Monument Mining and Leons Furniture go up and down completely randomly.
Pair Corralation between Monument Mining and Leons Furniture
Assuming the 90 days horizon Monument Mining Limited is expected to under-perform the Leons Furniture. In addition to that, Monument Mining is 3.47 times more volatile than Leons Furniture Limited. It trades about -0.08 of its total potential returns per unit of risk. Leons Furniture Limited is currently generating about -0.02 per unit of volatility. If you would invest 2,685 in Leons Furniture Limited on August 31, 2024 and sell it today you would lose (19.00) from holding Leons Furniture Limited or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Leons Furniture Limited
Performance |
| Timeline |
| Monument Mining |
| Leons Furniture |
Monument Mining and Leons Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Leons Furniture
The main advantage of trading using opposite Monument Mining and Leons Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Leons Furniture 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 Leons Furniture will offset losses from the drop in Leons Furniture's long position.| Monument Mining vs. Solar Alliance Energy | Monument Mining vs. Global X Active | Monument Mining vs. Financial 15 Split | Monument Mining vs. Rubicon Organics |
| Leons Furniture vs. Berkshire Hathaway CDR | Leons Furniture vs. JPMorgan Chase Co | Leons Furniture vs. Bank of America | Leons Furniture vs. Alphabet Inc CDR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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