Correlation Between Monks Investment and Intuitive Investments

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

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

Diversification Opportunities for Monks Investment and Intuitive Investments

-0.8

Correlation Coefficient

Monks Investment  Intuitive Investments

Pay attention - limited upside

The 3 months correlation between Monks and Intuitive is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments and Monks Investment 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 Monks Investment Trust are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Monks Investment i.e., Monks Investment and Intuitive Investments go up and down completely randomly.

Pair Corralation between Monks Investment and Intuitive Investments

Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.82 times more return on investment than Intuitive Investments. However, Monks Investment Trust is 1.22 times less risky than Intuitive Investments. It trades about 0.08 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.15 per unit of risk. If you would invest  115,798  in Monks Investment Trust on September 27, 2024 and sell it today you would earn a total of  11,002  from holding Monks Investment Trust or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Monks Investment Trust  vs.  Intuitive Investments Group

Monks Investment Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monks Investment Trust are ranked lower than 10 (%) 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 January 2025.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Monks Investment and Intuitive Investments

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

The idea behind Monks Investment Trust and Intuitive Investments Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.