Correlation Between Monks Investment and METALL ZUG
Can any of the company-specific risk be diversified away by investing in both Monks Investment and METALL ZUG 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 Monks Investment and METALL ZUG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monks Investment Trust and METALL ZUG AG, you can compare the effects of market volatilities on Monks Investment and METALL ZUG 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 Monks Investment with a short position of METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and METALL ZUG.
Diversification Opportunities for Monks Investment and METALL ZUG
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monks and METALL is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG and Monks Investment 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 Monks Investment Trust are associated (or correlated) with METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of Monks Investment i.e., Monks Investment and METALL ZUG go up and down completely randomly.
Pair Corralation between Monks Investment and METALL ZUG
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.65 times more return on investment than METALL ZUG. However, Monks Investment Trust is 1.54 times less risky than METALL ZUG. It trades about 0.09 of its potential returns per unit of risk. METALL ZUG AG is currently generating about -0.04 per unit of risk. If you would invest 125,200 in Monks Investment Trust on September 13, 2024 and sell it today you would earn a total of 2,000 from holding Monks Investment Trust or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Monks Investment Trust vs. METALL ZUG AG
Performance |
| Timeline |
| Monks Investment Trust |
| METALL ZUG AG |
Monks Investment and METALL ZUG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and METALL ZUG
The main advantage of trading using opposite Monks Investment and METALL ZUG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment position performs unexpectedly, METALL ZUG 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 METALL ZUG will offset losses from the drop in METALL ZUG's long position.| Monks Investment vs. Catalyst Media Group | Monks Investment vs. CATLIN GROUP | Monks Investment vs. Tamburi Investment Partners | Monks Investment vs. Magnora ASA |
| METALL ZUG vs. Symphony Environmental Technologies | METALL ZUG vs. Alaska Air Group | METALL ZUG vs. Bloomsbury Publishing Plc | METALL ZUG vs. Porvair 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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