Correlation Between Synthomer Plc and Moonpig Group

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

By analyzing existing cross correlation between Synthomer plc and Moonpig Group PLC, you can compare the effects of market volatilities on Synthomer Plc and Moonpig Group 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 Synthomer Plc with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Moonpig Group.

Diversification Opportunities for Synthomer Plc and Moonpig Group

0.16

Correlation Coefficient

Synthomer Plc  Moonpig Group

Average diversification

The 3 months correlation between Synthomer and Moonpig is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Moonpig Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonpig Group PLC and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Moonpig Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonpig Group PLC has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Moonpig Group go up and down completely randomly.

Pair Corralation between Synthomer Plc and Moonpig Group

Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the Moonpig Group. In addition to that, Synthomer Plc is 1.55 times more volatile than Moonpig Group PLC. It trades about -0.09 of its total potential returns per unit of risk. Moonpig Group PLC is currently generating about 0.06 per unit of volatility. If you would invest  11,650  in Moonpig Group PLC on October 11, 2024 and sell it today you would earn a total of  8,350  from holding Moonpig Group PLC or generate 71.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Synthomer plc  vs.  Moonpig Group PLC

Synthomer plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synthomer plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Moonpig Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moonpig Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Synthomer Plc and Moonpig Group

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

The idea behind Synthomer plc and Moonpig Group PLC 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.