Correlation Between Monks Investment and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Monks Investment and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Monks Investment and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and XLMedia PLC.
Diversification Opportunities for Monks Investment and XLMedia PLC
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monks and XLMedia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Monks Investment i.e., Monks Investment and XLMedia PLC go up and down completely randomly.
Pair Corralation between Monks Investment and XLMedia PLC
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.32 times more return on investment than XLMedia PLC. However, Monks Investment Trust is 3.13 times less risky than XLMedia PLC. It trades about 0.08 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.02 per unit of risk. If you would invest 116,184 in Monks Investment Trust on September 1, 2024 and sell it today you would earn a total of 10,816 from holding Monks Investment Trust or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. XLMedia PLC
Performance |
| Timeline |
| Monks Investment Trust |
| XLMedia PLC |
Monks Investment and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and XLMedia PLC
The main advantage of trading using opposite Monks Investment and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Monks Investment vs. Universal Display Corp | Monks Investment vs. Livermore Investments Group | Monks Investment vs. Bankers Investment Trust | Monks Investment vs. Kinnevik Investment AB |
| XLMedia PLC vs. Uniper SE | XLMedia PLC vs. Mulberry Group PLC | XLMedia PLC vs. London Security Plc | XLMedia PLC vs. Triad Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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