Correlation Between Revolution Beauty and Moonpig Group
Can any of the company-specific risk be diversified away by investing in both Revolution Beauty and Moonpig Group 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 Revolution Beauty and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revolution Beauty Group and Moonpig Group PLC, you can compare the effects of market volatilities on Revolution Beauty and Moonpig Group 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 Revolution Beauty with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revolution Beauty and Moonpig Group.
Diversification Opportunities for Revolution Beauty and Moonpig Group
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Revolution and Moonpig is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Revolution Beauty Group and Moonpig Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonpig Group PLC and Revolution Beauty 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 Revolution Beauty Group are associated (or correlated) with Moonpig Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonpig Group PLC has no effect on the direction of Revolution Beauty i.e., Revolution Beauty and Moonpig Group go up and down completely randomly.
Pair Corralation between Revolution Beauty and Moonpig Group
Assuming the 90 days trading horizon Revolution Beauty Group is expected to under-perform the Moonpig Group. In addition to that, Revolution Beauty is 1.4 times more volatile than Moonpig Group PLC. It trades about -0.08 of its total potential returns per unit of risk. Moonpig Group PLC is currently generating about -0.08 per unit of volatility. If you would invest 24,650 in Moonpig Group PLC on September 24, 2024 and sell it today you would lose (2,550) from holding Moonpig Group PLC or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revolution Beauty Group vs. Moonpig Group PLC
Performance |
| Timeline |
| Revolution Beauty |
| Moonpig Group PLC |
Revolution Beauty and Moonpig Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revolution Beauty and Moonpig Group
The main advantage of trading using opposite Revolution Beauty and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revolution Beauty position performs unexpectedly, Moonpig Group 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 Moonpig Group will offset losses from the drop in Moonpig Group's long position.| Revolution Beauty vs. Toyota Motor Corp | Revolution Beauty vs. SoftBank Group Corp | Revolution Beauty vs. OTP Bank Nyrt | Revolution Beauty vs. Newmont Corp |
| Moonpig Group vs. Chocoladefabriken Lindt Spruengli | Moonpig Group vs. Rockwood Realisation PLC | Moonpig Group vs. Toyota Motor Corp | Moonpig Group vs. Johnson Matthey PLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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