Correlation Between Monks Investment and 88 Energy
Can any of the company-specific risk be diversified away by investing in both Monks Investment and 88 Energy 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 88 Energy 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 88 Energy, you can compare the effects of market volatilities on Monks Investment and 88 Energy 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 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and 88 Energy.
Diversification Opportunities for Monks Investment and 88 Energy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monks and 88E is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy 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 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of Monks Investment i.e., Monks Investment and 88 Energy go up and down completely randomly.
Pair Corralation between Monks Investment and 88 Energy
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.19 times more return on investment than 88 Energy. However, Monks Investment Trust is 5.22 times less risky than 88 Energy. It trades about 0.07 of its potential returns per unit of risk. 88 Energy is currently generating about -0.04 per unit of risk. If you would invest 93,995 in Monks Investment Trust on September 14, 2024 and sell it today you would earn a total of 35,405 from holding Monks Investment Trust or generate 37.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. 88 Energy
Performance |
| Timeline |
| Monks Investment Trust |
| 88 Energy |
Monks Investment and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and 88 Energy
The main advantage of trading using opposite Monks Investment and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment position performs unexpectedly, 88 Energy 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 88 Energy will offset losses from the drop in 88 Energy's long position.| Monks Investment vs. Fevertree Drinks Plc | Monks Investment vs. AfriTin Mining | Monks Investment vs. GoldMining | Monks Investment vs. Griffin Mining |
| 88 Energy vs. Federal Realty Investment | 88 Energy vs. Odyssean Investment Trust | 88 Energy vs. Ebro Foods | 88 Energy vs. Monks Investment Trust |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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