Correlation Between Moncler SpA and Bosideng International

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

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

Diversification Opportunities for Moncler SpA and Bosideng International

-0.04

Correlation Coefficient

Moncler SpA  Bosideng International

Good diversification

The 3 months correlation between Moncler and Bosideng is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Moncler SpA and Bosideng International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosideng International and Moncler SpA 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 Moncler SpA are associated (or correlated) with Bosideng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosideng International has no effect on the direction of Moncler SpA i.e., Moncler SpA and Bosideng International go up and down completely randomly.

Pair Corralation between Moncler SpA and Bosideng International

Assuming the 90 days horizon Moncler SpA is expected to generate 0.59 times more return on investment than Bosideng International. However, Moncler SpA is 1.68 times less risky than Bosideng International. It trades about 0.12 of its potential returns per unit of risk. Bosideng International Holdings is currently generating about 0.0 per unit of risk. If you would invest  5,072  in Moncler SpA on December 27, 2024 and sell it today you would earn a total of  754.00  from holding Moncler SpA or generate 14.87% return on investment over 90 days.

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

Moncler SpA  vs.  Bosideng International Holding

Moncler SpA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Moncler SpA reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite nearly stable basic indicators, Bosideng International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Moncler SpA and Bosideng International

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

The idea behind Moncler SpA and Bosideng International Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.