Correlation Between Monks Investment and Catena Media
Can any of the company-specific risk be diversified away by investing in both Monks Investment and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on Monks Investment and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Catena Media.
Diversification Opportunities for Monks Investment and Catena Media
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monks and Catena is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Monks Investment i.e., Monks Investment and Catena Media go up and down completely randomly.
Pair Corralation between Monks Investment and Catena Media
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.25 times more return on investment than Catena Media. However, Monks Investment Trust is 3.97 times less risky than Catena Media. It trades about 0.36 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.21 per unit of risk. If you would invest 118,200 in Monks Investment Trust on August 29, 2024 and sell it today you would earn a total of 9,200 from holding Monks Investment Trust or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. Catena Media PLC
Performance |
| Timeline |
| Monks Investment Trust |
| Catena Media PLC |
Monks Investment and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and Catena Media
The main advantage of trading using opposite Monks Investment and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| Monks Investment vs. Toyota Motor Corp | Monks Investment vs. Lendinvest PLC | Monks Investment vs. Neometals | Monks Investment vs. Coor Service Management |
| Catena Media vs. Lendinvest PLC | Catena Media vs. Neometals | Catena Media vs. Coor Service Management | Catena Media vs. Albion Technology General |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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