Correlation Between State Bank and Monks Investment
Can any of the company-specific risk be diversified away by investing in both State Bank and Monks Investment 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 State Bank and Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Monks Investment Trust, you can compare the effects of market volatilities on State Bank and Monks Investment 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 State Bank with a short position of Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Monks Investment.
Diversification Opportunities for State Bank and Monks Investment
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between State and Monks is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust and State Bank 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 State Bank of are associated (or correlated) with Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of State Bank i.e., State Bank and Monks Investment go up and down completely randomly.
Pair Corralation between State Bank and Monks Investment
Assuming the 90 days trading horizon State Bank is expected to generate 4.59 times less return on investment than Monks Investment. In addition to that, State Bank is 1.84 times more volatile than Monks Investment Trust. It trades about 0.03 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.28 per unit of volatility. If you would invest 119,000 in Monks Investment Trust on August 30, 2024 and sell it today you would earn a total of 7,400 from holding Monks Investment Trust or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Monks Investment Trust
Performance |
| Timeline |
| State Bank |
| Monks Investment Trust |
State Bank and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Monks Investment
The main advantage of trading using opposite State Bank and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment's long position.| State Bank vs. Axfood AB | State Bank vs. Playtech Plc | State Bank vs. Gaming Realms plc | State Bank vs. Wheaton Precious Metals |
| Monks Investment vs. EVS Broadcast Equipment | Monks Investment vs. St Galler Kantonalbank | Monks Investment vs. Ashtead Technology Holdings | Monks Investment vs. CleanTech Lithium 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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