Correlation Between MoneysupermarketCom and Thor Mining
Can any of the company-specific risk be diversified away by investing in both MoneysupermarketCom and Thor Mining 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 MoneysupermarketCom and Thor Mining 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 Thor Mining PLC, you can compare the effects of market volatilities on MoneysupermarketCom and Thor Mining 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 MoneysupermarketCom with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoneysupermarketCom and Thor Mining.
Diversification Opportunities for MoneysupermarketCom and Thor Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between MoneysupermarketCom and Thor is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MoneysupermarketCom Group PLC and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and MoneysupermarketCom 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 Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of MoneysupermarketCom i.e., MoneysupermarketCom and Thor Mining go up and down completely randomly.
Pair Corralation between MoneysupermarketCom and Thor Mining
Assuming the 90 days trading horizon MoneysupermarketCom Group PLC is expected to generate 0.38 times more return on investment than Thor Mining. However, MoneysupermarketCom Group PLC is 2.62 times less risky than Thor Mining. It trades about -0.02 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.05 per unit of risk. If you would invest 23,948 in MoneysupermarketCom Group PLC on August 31, 2024 and sell it today you would lose (4,348) from holding MoneysupermarketCom Group PLC or give up 18.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoneysupermarketCom Group PLC vs. Thor Mining PLC
Performance |
| Timeline |
| MoneysupermarketCom |
| Thor Mining PLC |
MoneysupermarketCom and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MoneysupermarketCom and Thor Mining
The main advantage of trading using opposite MoneysupermarketCom and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneysupermarketCom position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| MoneysupermarketCom vs. Berkshire Hathaway | MoneysupermarketCom vs. Hyundai Motor | MoneysupermarketCom vs. Samsung Electronics Co | MoneysupermarketCom vs. Samsung Electronics Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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