Correlation Between Monsenso and Silkeborg

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

By analyzing existing cross correlation between Monsenso AS and Silkeborg IF Invest, you can compare the effects of market volatilities on Monsenso and Silkeborg 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 Monsenso with a short position of Silkeborg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monsenso and Silkeborg.

Diversification Opportunities for Monsenso and Silkeborg

-0.58

Correlation Coefficient

Monsenso  Silkeborg

Excellent diversification

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

Pair Corralation between Monsenso and Silkeborg

Assuming the 90 days trading horizon Monsenso AS is expected to generate 2.68 times more return on investment than Silkeborg. However, Monsenso is 2.68 times more volatile than Silkeborg IF Invest. It trades about 0.03 of its potential returns per unit of risk. Silkeborg IF Invest is currently generating about -0.13 per unit of risk. If you would invest  37.00  in Monsenso AS on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Monsenso AS or generate 0.0% return on investment over 90 days.

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

Monsenso AS  vs.  Silkeborg IF Invest

Monsenso AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Silkeborg IF Invest

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silkeborg IF Invest are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Silkeborg displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monsenso and Silkeborg

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

The idea behind Monsenso AS and Silkeborg IF Invest 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.