Correlation Between Monks Investment and River
Can any of the company-specific risk be diversified away by investing in both Monks Investment and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Monks Investment and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and River.
Diversification Opportunities for Monks Investment and River
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monks and River is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Monks Investment i.e., Monks Investment and River go up and down completely randomly.
Pair Corralation between Monks Investment and River
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.67 times more return on investment than River. However, Monks Investment Trust is 1.49 times less risky than River. It trades about 0.1 of its potential returns per unit of risk. River and Mercantile is currently generating about 0.04 per unit of risk. If you would invest 106,003 in Monks Investment Trust on November 3, 2024 and sell it today you would earn a total of 27,597 from holding Monks Investment Trust or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. River and Mercantile
Performance |
| Timeline |
| Monks Investment Trust |
| River and Mercantile |
Monks Investment and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and River
The main advantage of trading using opposite Monks Investment and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Monks Investment vs. XLMedia PLC | Monks Investment vs. LBG Media PLC | Monks Investment vs. JD Sports Fashion | Monks Investment vs. Norwegian Air Shuttle |
| River vs. Fidelity National Information | River vs. Datalogic | River vs. Creo Medical Group | River vs. Advanced Medical Solutions |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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