Correlation Between Monnari Trade and ED Invest
Can any of the company-specific risk be diversified away by investing in both Monnari Trade and ED Invest 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 Monnari Trade and ED Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monnari Trade SA and ED Invest SA, you can compare the effects of market volatilities on Monnari Trade and ED Invest 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 Monnari Trade with a short position of ED Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monnari Trade and ED Invest.
Diversification Opportunities for Monnari Trade and ED Invest
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monnari and EDI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Monnari Trade SA and ED Invest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Invest SA and Monnari Trade 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 Monnari Trade SA are associated (or correlated) with ED Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Invest SA has no effect on the direction of Monnari Trade i.e., Monnari Trade and ED Invest go up and down completely randomly.
Pair Corralation between Monnari Trade and ED Invest
Assuming the 90 days trading horizon Monnari Trade is expected to generate 15.15 times less return on investment than ED Invest. But when comparing it to its historical volatility, Monnari Trade SA is 2.9 times less risky than ED Invest. It trades about 0.01 of its potential returns per unit of risk. ED Invest SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 273.00 in ED Invest SA on September 5, 2024 and sell it today you would earn a total of 375.00 from holding ED Invest SA or generate 137.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monnari Trade SA vs. ED Invest SA
Performance |
| Timeline |
| Monnari Trade SA |
| ED Invest SA |
Monnari Trade and ED Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monnari Trade and ED Invest
The main advantage of trading using opposite Monnari Trade and ED Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monnari Trade position performs unexpectedly, ED Invest 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 ED Invest will offset losses from the drop in ED Invest's long position.| Monnari Trade vs. LPP SA | Monnari Trade vs. Esotiq Henderson SA | Monnari Trade vs. Asseco Business Solutions | Monnari Trade vs. Kogeneracja SA |
| ED Invest vs. GreenX Metals | ED Invest vs. SOFTWARE MANSION SPOLKA | ED Invest vs. Quantum Software SA | ED Invest vs. Medicalg |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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