Correlation Between St Galler and Moonpig Group

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

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

Diversification Opportunities for St Galler and Moonpig Group

0.68

Correlation Coefficient

St Galler  Moonpig Group

Poor diversification

The 3 months correlation between 0QQZ and Moonpig is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank 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 St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and Moonpig Group go up and down completely randomly.

Pair Corralation between St Galler and Moonpig Group

Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 0.23 times more return on investment than Moonpig Group. However, St Galler Kantonalbank is 4.4 times less risky than Moonpig Group. It trades about 0.17 of its potential returns per unit of risk. Moonpig Group PLC is currently generating about -0.14 per unit of risk. If you would invest  41,950  in St Galler Kantonalbank on September 15, 2024 and sell it today you would earn a total of  1,200  from holding St Galler Kantonalbank or generate 2.86% return on investment over 90 days.

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

St Galler Kantonalbank  vs.  Moonpig Group PLC

St Galler Kantonalbank

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, St Galler is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Moonpig Group PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moonpig Group PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Moonpig Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with St Galler and Moonpig Group

The main advantage of trading using opposite St Galler and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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 St Galler Kantonalbank 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.