Correlation Between Moneta Money and Photon Energy

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

By analyzing existing cross correlation between Moneta Money Bank and Photon Energy NV, you can compare the effects of market volatilities on Moneta Money and Photon Energy 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 Moneta Money with a short position of Photon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moneta Money and Photon Energy.

Diversification Opportunities for Moneta Money and Photon Energy

-0.58

Correlation Coefficient

Moneta Money  Photon Energy

Excellent diversification

The 3 months correlation between Moneta and Photon is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Moneta Money Bank and Photon Energy NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photon Energy NV and Moneta Money 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 Moneta Money Bank are associated (or correlated) with Photon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photon Energy NV has no effect on the direction of Moneta Money i.e., Moneta Money and Photon Energy go up and down completely randomly.

Pair Corralation between Moneta Money and Photon Energy

Assuming the 90 days trading horizon Moneta Money Bank is expected to generate 0.85 times more return on investment than Photon Energy. However, Moneta Money Bank is 1.18 times less risky than Photon Energy. It trades about 0.21 of its potential returns per unit of risk. Photon Energy NV is currently generating about -0.07 per unit of risk. If you would invest  12,380  in Moneta Money Bank on December 30, 2024 and sell it today you would earn a total of  2,520  from holding Moneta Money Bank or generate 20.36% return on investment over 90 days.

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

Moneta Money Bank  vs.  Photon Energy NV

Moneta Money Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moneta Money Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Moneta Money reported solid returns over the last few months and may actually be approaching a breakup point.

Photon Energy NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Photon Energy NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Moneta Money and Photon Energy

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

The idea behind Moneta Money Bank and Photon Energy NV 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.