Correlation Between Bosideng International and Moncler SpA

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

By analyzing existing cross correlation between Bosideng International Holdings and Moncler SpA, you can compare the effects of market volatilities on Bosideng International and Moncler SpA 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 Bosideng International with a short position of Moncler SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosideng International and Moncler SpA.

Diversification Opportunities for Bosideng International and Moncler SpA

-0.07

Correlation Coefficient

Bosideng International  Moncler SpA

Good diversification

The 3 months correlation between Bosideng and Moncler is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bosideng International Holding and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA and Bosideng International 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 Bosideng International Holdings are associated (or correlated) with Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of Bosideng International i.e., Bosideng International and Moncler SpA go up and down completely randomly.

Pair Corralation between Bosideng International and Moncler SpA

Assuming the 90 days horizon Bosideng International is expected to generate 157.84 times less return on investment than Moncler SpA. In addition to that, Bosideng International is 1.34 times more volatile than Moncler SpA. It trades about 0.0 of its total potential returns per unit of risk. Moncler SpA is currently generating about 0.15 per unit of volatility. If you would invest  5,279  in Moncler SpA on December 23, 2024 and sell it today you would earn a total of  1,307  from holding Moncler SpA or generate 24.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Bosideng International Holding  vs.  Moncler SpA

Bosideng International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bosideng International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Bosideng International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Moncler SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Moncler SpA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bosideng International and Moncler SpA

The main advantage of trading using opposite Bosideng International and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosideng International position performs unexpectedly, Moncler SpA 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 Moncler SpA will offset losses from the drop in Moncler SpA's long position.

The idea behind Bosideng International Holdings and Moncler SpA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.