Correlation Between Monnari Trade and Ferro SA
Can any of the company-specific risk be diversified away by investing in both Monnari Trade and Ferro SA 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 Ferro SA 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 Ferro SA, you can compare the effects of market volatilities on Monnari Trade and Ferro SA 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 Ferro SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monnari Trade and Ferro SA.
Diversification Opportunities for Monnari Trade and Ferro SA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monnari and Ferro is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Monnari Trade SA and Ferro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferro 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 Ferro SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferro SA has no effect on the direction of Monnari Trade i.e., Monnari Trade and Ferro SA go up and down completely randomly.
Pair Corralation between Monnari Trade and Ferro SA
Assuming the 90 days trading horizon Monnari Trade SA is expected to under-perform the Ferro SA. But the stock apears to be less risky and, when comparing its historical volatility, Monnari Trade SA is 1.1 times less risky than Ferro SA. The stock trades about -0.01 of its potential returns per unit of risk. The Ferro SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,901 in Ferro SA on September 4, 2024 and sell it today you would earn a total of 519.00 from holding Ferro SA or generate 17.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Monnari Trade SA vs. Ferro SA
Performance |
Timeline |
Monnari Trade SA |
Ferro SA |
Monnari Trade and Ferro SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Monnari Trade and Ferro SA
The main advantage of trading using opposite Monnari Trade and Ferro SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monnari Trade position performs unexpectedly, Ferro SA 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 Ferro SA will offset losses from the drop in Ferro SA's long position.Monnari Trade vs. Movie Games SA | Monnari Trade vs. Drago entertainment SA | Monnari Trade vs. X Trade Brokers | Monnari Trade vs. Quantum Software SA |
Ferro SA vs. Intersport Polska SA | Ferro SA vs. Medicalg | Ferro SA vs. Play2Chill SA | Ferro SA vs. Movie Games SA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |