Correlation Between Spencers Retail and 63 Moons

Can any of the company-specific risk be diversified away by investing in both Spencers Retail and 63 Moons 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 Spencers Retail and 63 Moons into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Spencers Retail Limited and 63 moons technologies, you can compare the effects of market volatilities on Spencers Retail and 63 Moons 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 Spencers Retail with a short position of 63 Moons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spencers Retail and 63 Moons.

Diversification Opportunities for Spencers Retail and 63 Moons

-0.6

Correlation Coefficient

Spencers Retail  63 Moons

Excellent diversification

The 3 months correlation between Spencers and 63MOONS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Spencers Retail Limited and 63 moons technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 63 moons technologies and Spencers Retail 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 Spencers Retail Limited are associated (or correlated) with 63 Moons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 63 moons technologies has no effect on the direction of Spencers Retail i.e., Spencers Retail and 63 Moons go up and down completely randomly.

Pair Corralation between Spencers Retail and 63 Moons

Assuming the 90 days trading horizon Spencers Retail is expected to generate 32.24 times less return on investment than 63 Moons. But when comparing it to its historical volatility, Spencers Retail Limited is 1.45 times less risky than 63 Moons. It trades about 0.04 of its potential returns per unit of risk. 63 moons technologies is currently generating about 0.89 of returns per unit of risk over similar time horizon. If you would invest  58,745  in 63 moons technologies on September 21, 2024 and sell it today you would earn a total of  44,420  from holding 63 moons technologies or generate 75.61% return on investment over 90 days.

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

Spencers Retail Limited  vs.  63 moons technologies

Spencers Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spencers Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

63 moons technologies

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in 63 moons technologies are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, 63 Moons unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spencers Retail and 63 Moons

The main advantage of trading using opposite Spencers Retail and 63 Moons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spencers Retail position performs unexpectedly, 63 Moons 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 63 Moons will offset losses from the drop in 63 Moons' long position.

The idea behind Spencers Retail Limited and 63 moons technologies 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.