Correlation Between COMPUTERSHARE and Moncler SpA

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

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

Diversification Opportunities for COMPUTERSHARE and Moncler SpA

-0.57

Correlation Coefficient

COMPUTERSHARE  Moncler SpA

Excellent diversification

The 3 months correlation between COMPUTERSHARE and Moncler is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTERSHARE and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA and COMPUTERSHARE 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 COMPUTERSHARE 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 COMPUTERSHARE i.e., COMPUTERSHARE and Moncler SpA go up and down completely randomly.

Pair Corralation between COMPUTERSHARE and Moncler SpA

Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 67.51 times less return on investment than Moncler SpA. But when comparing it to its historical volatility, COMPUTERSHARE is 1.34 times less risky than Moncler SpA. It trades about 0.01 of its potential returns per unit of risk. Moncler SpA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  4,635  in Moncler SpA on October 4, 2024 and sell it today you would earn a total of  465.00  from holding Moncler SpA or generate 10.03% return on investment over 90 days.

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

COMPUTERSHARE  vs.  Moncler SpA

COMPUTERSHARE

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, COMPUTERSHARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Moncler SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moncler SpA has generated negative risk-adjusted returns adding no value to investors with long positions. 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 COMPUTERSHARE and Moncler SpA

The main advantage of trading using opposite COMPUTERSHARE and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMPUTERSHARE 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 COMPUTERSHARE 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.