Correlation Between Monks Investment and Mindflair Plc

Can any of the company-specific risk be diversified away by investing in both Monks Investment and Mindflair Plc 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 Mindflair Plc 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 Mindflair Plc, you can compare the effects of market volatilities on Monks Investment and Mindflair Plc 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 Mindflair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Mindflair Plc.

Diversification Opportunities for Monks Investment and Mindflair Plc

-0.07

Correlation Coefficient

Monks Investment  Mindflair Plc

Good diversification

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

Pair Corralation between Monks Investment and Mindflair Plc

Assuming the 90 days trading horizon Monks Investment is expected to generate 11.5 times less return on investment than Mindflair Plc. But when comparing it to its historical volatility, Monks Investment Trust is 14.76 times less risky than Mindflair Plc. It trades about 0.07 of its potential returns per unit of risk. Mindflair Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Mindflair Plc on September 29, 2024 and sell it today you would earn a total of  12.00  from holding Mindflair Plc or generate 25.0% return on investment over 90 days.

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

Monks Investment Trust  vs.  Mindflair Plc

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.

Mindflair Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindflair Plc 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Monks Investment and Mindflair Plc

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

The idea behind Monks Investment Trust and Mindflair 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.