Correlation Between Monks Investment and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Monks Investment and SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital PLC, you can compare the effects of market volatilities on Monks Investment and SupplyMe Capital 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 SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and SupplyMe Capital.
Diversification Opportunities for Monks Investment and SupplyMe Capital
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monks and SupplyMe is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Monks Investment i.e., Monks Investment and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Monks Investment and SupplyMe Capital
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.12 times more return on investment than SupplyMe Capital. However, Monks Investment Trust is 8.4 times less risky than SupplyMe Capital. It trades about 0.1 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.1 per unit of risk. If you would invest 101,611 in Monks Investment Trust on September 4, 2024 and sell it today you would earn a total of 26,189 from holding Monks Investment Trust or generate 25.77% 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. SupplyMe Capital PLC
Performance |
| Timeline |
| Monks Investment Trust |
| SupplyMe Capital PLC |
Monks Investment and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and SupplyMe Capital
The main advantage of trading using opposite Monks Investment and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment position performs unexpectedly, SupplyMe Capital 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.| Monks Investment vs. SupplyMe Capital PLC | Monks Investment vs. Lloyds Banking Group | Monks Investment vs. Premier African Minerals | Monks Investment vs. SANTANDER UK 8 |
| SupplyMe Capital vs. Alior Bank SA | SupplyMe Capital vs. Sparebank 1 SR | SupplyMe Capital vs. Veolia Environnement VE | SupplyMe Capital vs. CAP LEASE AVIATION |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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