Correlation Between Moneysupermarket and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both Moneysupermarket and Haleon 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 Moneysupermarket and Haleon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoneysupermarketCom Group PLC and Haleon PLC, you can compare the effects of market volatilities on Moneysupermarket and Haleon 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 Moneysupermarket with a short position of Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moneysupermarket and Haleon PLC.
Diversification Opportunities for Moneysupermarket and Haleon PLC
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Moneysupermarket and Haleon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MoneysupermarketCom Group PLC and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC and Moneysupermarket 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 MoneysupermarketCom Group PLC are associated (or correlated) with Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of Moneysupermarket i.e., Moneysupermarket and Haleon PLC go up and down completely randomly.
Pair Corralation between Moneysupermarket and Haleon PLC
Assuming the 90 days trading horizon MoneysupermarketCom Group PLC is expected to generate 1.65 times more return on investment than Haleon PLC. However, Moneysupermarket is 1.65 times more volatile than Haleon PLC. It trades about 0.27 of its potential returns per unit of risk. Haleon PLC is currently generating about 0.23 per unit of risk. If you would invest 18,160 in MoneysupermarketCom Group PLC on November 28, 2024 and sell it today you would earn a total of 1,940 from holding MoneysupermarketCom Group PLC or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoneysupermarketCom Group PLC vs. Haleon PLC
Performance |
| Timeline |
| MoneysupermarketCom |
| Haleon PLC |
Moneysupermarket and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moneysupermarket and Haleon PLC
The main advantage of trading using opposite Moneysupermarket and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moneysupermarket position performs unexpectedly, Haleon 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 Haleon PLC will offset losses from the drop in Haleon PLC's long position.| Moneysupermarket vs. SMA Solar Technology | Moneysupermarket vs. Vitec Software Group | Moneysupermarket vs. Raytheon Technologies Corp | Moneysupermarket vs. Micron Technology |
| Haleon PLC vs. Impax Environmental Markets | Haleon PLC vs. Fair Oaks Income | Haleon PLC vs. Foresight Environmental Infrastructure | Haleon PLC vs. Norwegian Air Shuttle |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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