Correlation Between VF and Moncler SpA

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

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

Diversification Opportunities for VF and Moncler SpA

0.12

Correlation Coefficient

VF  Moncler SpA

Average diversification

The 3 months correlation between VF and Moncler is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA and VF 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 VF Corporation 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 VF i.e., VF and Moncler SpA go up and down completely randomly.

Pair Corralation between VF and Moncler SpA

Considering the 90-day investment horizon VF Corporation is expected to under-perform the Moncler SpA. In addition to that, VF is 1.31 times more volatile than Moncler SpA. It trades about -0.14 of its total potential returns per unit of risk. Moncler SpA is currently generating about 0.17 per unit of volatility. If you would invest  5,259  in Moncler SpA on December 19, 2024 and sell it today you would earn a total of  1,479  from holding Moncler SpA or generate 28.12% return on investment over 90 days.

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

VF Corp.  vs.  Moncler SpA

VF Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days VF Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Moncler SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Moncler SpA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VF and Moncler SpA

The main advantage of trading using opposite VF and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF 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 VF Corporation 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..