Correlation Between Nasdaq and Moncler SpA

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

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

Diversification Opportunities for Nasdaq and Moncler SpA

-0.74

Correlation Coefficient

Nasdaq  Moncler SpA

Pay attention - limited upside

The 3 months correlation between Nasdaq and Moncler is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of Nasdaq i.e., Nasdaq and Moncler SpA go up and down completely randomly.

Pair Corralation between Nasdaq and Moncler SpA

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Moncler SpA. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.67 times less risky than Moncler SpA. The stock trades about -0.18 of its potential returns per unit of risk. The Moncler SpA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  4,632  in Moncler SpA on September 23, 2024 and sell it today you would earn a total of  384.00  from holding Moncler SpA or generate 8.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Nasdaq Inc  vs.  Moncler SpA

Nasdaq Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Moncler SpA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Moncler SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nasdaq and Moncler SpA

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

The idea behind Nasdaq Inc and Moncler SpA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.