Correlation Between Chocoladefabriken and Monks Investment

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Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken 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 Chocoladefabriken and Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and Monks Investment Trust, you can compare the effects of market volatilities on Chocoladefabriken 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 Chocoladefabriken with a short position of Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Monks Investment.

Diversification Opportunities for Chocoladefabriken and Monks Investment

-0.87
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Chocoladefabriken and Monks is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli 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 Chocoladefabriken i.e., Chocoladefabriken and Monks Investment go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Monks Investment

Assuming the 90 days trading horizon Chocoladefabriken is expected to generate 6.11 times less return on investment than Monks Investment. In addition to that, Chocoladefabriken is 1.08 times more volatile than Monks Investment Trust. It trades about 0.02 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.1 per unit of volatility. If you would invest  94,524  in Monks Investment Trust on October 5, 2024 and sell it today you would earn a total of  33,476  from holding Monks Investment Trust or generate 35.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy99.04%
ValuesDaily Returns

Chocoladefabriken Lindt Spruen  vs.  Monks Investment Trust

 Performance 
       Timeline  
Chocoladefabriken Lindt 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Monks Investment Trust 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Monks Investment Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Monks Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Chocoladefabriken and Monks Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chocoladefabriken and Monks Investment

The main advantage of trading using opposite Chocoladefabriken and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken 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.
The idea behind Chocoladefabriken Lindt Spruengli and Monks Investment Trust 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.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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