Correlation Between VeriSign and Moonpig Group

Can any of the company-specific risk be diversified away by investing in both VeriSign 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 VeriSign and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VeriSign and Moonpig Group PLC, you can compare the effects of market volatilities on VeriSign 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 VeriSign with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VeriSign and Moonpig Group.

Diversification Opportunities for VeriSign and Moonpig Group

-0.6

Correlation Coefficient

VeriSign  Moonpig Group

Excellent diversification

The 3 months correlation between VeriSign and Moonpig is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding VeriSign 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 VeriSign 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 VeriSign 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 VeriSign i.e., VeriSign and Moonpig Group go up and down completely randomly.

Pair Corralation between VeriSign and Moonpig Group

Assuming the 90 days trading horizon VeriSign is expected to generate 0.49 times more return on investment than Moonpig Group. However, VeriSign is 2.05 times less risky than Moonpig Group. It trades about 0.12 of its potential returns per unit of risk. Moonpig Group PLC is currently generating about 0.0 per unit of risk. If you would invest  18,593  in VeriSign on October 4, 2024 and sell it today you would earn a total of  1,865  from holding VeriSign or generate 10.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

VeriSign  vs.  Moonpig Group PLC

VeriSign

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VeriSign are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VeriSign may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Moonpig Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moonpig Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Moonpig Group is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VeriSign and Moonpig Group

The main advantage of trading using opposite VeriSign and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VeriSign 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.

The idea behind VeriSign and Moonpig Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.