Correlation Between Monnari Trade and SOFTWARE MANSION
Can any of the company-specific risk be diversified away by investing in both Monnari Trade and SOFTWARE MANSION 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 SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA, you can compare the effects of market volatilities on Monnari Trade and SOFTWARE MANSION 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 SOFTWARE MANSION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monnari Trade and SOFTWARE MANSION.
Diversification Opportunities for Monnari Trade and SOFTWARE MANSION
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Monnari and SOFTWARE is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Monnari Trade SA and SOFTWARE MANSION SPOLKA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTWARE MANSION SPOLKA has no effect on the direction of Monnari Trade i.e., Monnari Trade and SOFTWARE MANSION go up and down completely randomly.
Pair Corralation between Monnari Trade and SOFTWARE MANSION
Assuming the 90 days trading horizon Monnari Trade SA is expected to under-perform the SOFTWARE MANSION. But the stock apears to be less risky and, when comparing its historical volatility, Monnari Trade SA is 1.93 times less risky than SOFTWARE MANSION. The stock trades about -0.01 of its potential returns per unit of risk. The SOFTWARE MANSION SPOLKA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,896 in SOFTWARE MANSION SPOLKA on August 25, 2024 and sell it today you would earn a total of 104.00 from holding SOFTWARE MANSION SPOLKA or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Monnari Trade SA vs. SOFTWARE MANSION SPOLKA
Performance |
| Timeline |
| Monnari Trade SA |
| SOFTWARE MANSION SPOLKA |
Monnari Trade and SOFTWARE MANSION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monnari Trade and SOFTWARE MANSION
The main advantage of trading using opposite Monnari Trade and SOFTWARE MANSION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monnari Trade position performs unexpectedly, SOFTWARE MANSION 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 SOFTWARE MANSION will offset losses from the drop in SOFTWARE MANSION's long position.| Monnari Trade vs. LPP SA | Monnari Trade vs. Esotiq Henderson SA | Monnari Trade vs. Asseco Business Solutions | Monnari Trade vs. Detalion Games SA |
| SOFTWARE MANSION vs. Banco Santander SA | SOFTWARE MANSION vs. UniCredit SpA | SOFTWARE MANSION vs. CEZ as | SOFTWARE MANSION vs. Polski Koncern Naftowy |
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
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |