Correlation Between Fresh Del and Moncler SpA

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

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

Diversification Opportunities for Fresh Del and Moncler SpA

-0.82

Correlation Coefficient

Fresh Del  Moncler SpA

Pay attention - limited upside

The 3 months correlation between Fresh and Moncler is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA and Fresh Del 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 Fresh Del Monte 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 Fresh Del i.e., Fresh Del and Moncler SpA go up and down completely randomly.

Pair Corralation between Fresh Del and Moncler SpA

Considering the 90-day investment horizon Fresh Del Monte is expected to under-perform the Moncler SpA. But the stock apears to be less risky and, when comparing its historical volatility, Fresh Del Monte is 1.82 times less risky than Moncler SpA. The stock trades about -0.03 of its potential returns per unit of risk. The Moncler SpA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  5,126  in Moncler SpA on September 12, 2024 and sell it today you would earn a total of  324.00  from holding Moncler SpA or generate 6.32% return on investment over 90 days.

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

Fresh Del Monte  vs.  Moncler SpA

Fresh Del Monte

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Del Monte are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Fresh Del reported solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of fairly strong basic indicators, Moncler SpA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fresh Del and Moncler SpA

The main advantage of trading using opposite Fresh Del and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del 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 Fresh Del Monte 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.