Correlation Between Regional Container and Mono Next
Can any of the company-specific risk be diversified away by investing in both Regional Container and Mono Next 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 Regional Container and Mono Next into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Container Lines and Mono Next Public, you can compare the effects of market volatilities on Regional Container and Mono Next 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 Regional Container with a short position of Mono Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Mono Next.
Diversification Opportunities for Regional Container and Mono Next
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regional and Mono is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Mono Next Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mono Next Public and Regional Container 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 Regional Container Lines are associated (or correlated) with Mono Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mono Next Public has no effect on the direction of Regional Container i.e., Regional Container and Mono Next go up and down completely randomly.
Pair Corralation between Regional Container and Mono Next
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 0.65 times more return on investment than Mono Next. However, Regional Container Lines is 1.54 times less risky than Mono Next. It trades about 0.01 of its potential returns per unit of risk. Mono Next Public is currently generating about 0.0 per unit of risk. If you would invest 2,686 in Regional Container Lines on November 19, 2024 and sell it today you would lose (206.00) from holding Regional Container Lines or give up 7.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Container Lines vs. Mono Next Public
Performance |
| Timeline |
| Regional Container Lines |
| Mono Next Public |
Regional Container and Mono Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Container and Mono Next
The main advantage of trading using opposite Regional Container and Mono Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container position performs unexpectedly, Mono Next 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 Mono Next will offset losses from the drop in Mono Next's long position.| Regional Container vs. Precious Shipping Public | Regional Container vs. Thoresen Thai Agencies | Regional Container vs. The Siam Cement | Regional Container vs. PTT Public |
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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.
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