Correlation Between Wizz Air and Monks Investment
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Monks Investment Trust, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Monks Investment.
Diversification Opportunities for Wizz Air and Monks Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wizz and Monks is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings 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 Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and Monks Investment go up and down completely randomly.
Pair Corralation between Wizz Air and Monks Investment
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Monks Investment. In addition to that, Wizz Air is 2.7 times more volatile than Monks Investment Trust. It trades about -0.06 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.19 per unit of volatility. If you would invest 126,400 in Monks Investment Trust on November 1, 2024 and sell it today you would earn a total of 5,800 from holding Monks Investment Trust or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Monks Investment Trust
Performance |
| Timeline |
| Wizz Air Holdings |
| Monks Investment Trust |
Wizz Air and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Monks Investment
The main advantage of trading using opposite Wizz Air and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. Arrow Electronics | Wizz Air vs. Ecofin Global Utilities | Wizz Air vs. Monster Beverage Corp | Wizz Air vs. Take Two Interactive Software |
| Monks Investment vs. Gaming Realms plc | Monks Investment vs. Gear4music Plc | Monks Investment vs. Universal Music Group | Monks Investment vs. Scandic Hotels Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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