Correlation Between Corporate Office and Moncler SpA

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

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

Diversification Opportunities for Corporate Office and Moncler SpA

-0.36

Correlation Coefficient

Corporate Office  Moncler SpA

Very good diversification

The 3 months correlation between Corporate and Moncler is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA and Corporate Office 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 Corporate Office Properties 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 Corporate Office i.e., Corporate Office and Moncler SpA go up and down completely randomly.

Pair Corralation between Corporate Office and Moncler SpA

Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the Moncler SpA. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Office Properties is 1.04 times less risky than Moncler SpA. The stock trades about -0.22 of its potential returns per unit of risk. The Moncler SpA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,122  in Moncler SpA on October 17, 2024 and sell it today you would earn a total of  200.00  from holding Moncler SpA or generate 3.9% return on investment over 90 days.

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

Corporate Office Properties  vs.  Moncler SpA

Corporate Office Pro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corporate Office Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Corporate Office is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Corporate Office and Moncler SpA

The main advantage of trading using opposite Corporate Office and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office 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 Corporate Office Properties 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.