Correlation Between Silly Monks and Embassy Office

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

By analyzing existing cross correlation between Silly Monks Entertainment and Embassy Office Parks, you can compare the effects of market volatilities on Silly Monks and Embassy Office 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 Silly Monks with a short position of Embassy Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silly Monks and Embassy Office.

Diversification Opportunities for Silly Monks and Embassy Office

0.06

Correlation Coefficient

Silly Monks  Embassy Office

Significant diversification

The 3 months correlation between Silly and Embassy is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Silly Monks Entertainment and Embassy Office Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embassy Office Parks and Silly Monks 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 Silly Monks Entertainment are associated (or correlated) with Embassy Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embassy Office Parks has no effect on the direction of Silly Monks i.e., Silly Monks and Embassy Office go up and down completely randomly.

Pair Corralation between Silly Monks and Embassy Office

Assuming the 90 days trading horizon Silly Monks Entertainment is expected to generate 2.34 times more return on investment than Embassy Office. However, Silly Monks is 2.34 times more volatile than Embassy Office Parks. It trades about 0.06 of its potential returns per unit of risk. Embassy Office Parks is currently generating about -0.08 per unit of risk. If you would invest  2,326  in Silly Monks Entertainment on October 8, 2024 and sell it today you would earn a total of  206.00  from holding Silly Monks Entertainment or generate 8.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Silly Monks Entertainment  vs.  Embassy Office Parks

Silly Monks Entertainment

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silly Monks Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Silly Monks may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Embassy Office Parks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Embassy Office Parks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Embassy Office is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Silly Monks and Embassy Office

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

The idea behind Silly Monks Entertainment and Embassy Office Parks 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.