Correlation Between Monks Investment and Albion Technology

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

By analyzing existing cross correlation between Monks Investment Trust and Albion Technology General, you can compare the effects of market volatilities on Monks Investment and Albion Technology 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 Monks Investment with a short position of Albion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Albion Technology.

Diversification Opportunities for Monks Investment and Albion Technology

0.13

Correlation Coefficient

Monks Investment  Albion Technology

Average diversification

The 3 months correlation between Monks and Albion is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General and Monks Investment 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 Monks Investment Trust are associated (or correlated) with Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of Monks Investment i.e., Monks Investment and Albion Technology go up and down completely randomly.

Pair Corralation between Monks Investment and Albion Technology

Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.99 times more return on investment than Albion Technology. However, Monks Investment Trust is 1.01 times less risky than Albion Technology. It trades about 0.23 of its potential returns per unit of risk. Albion Technology General is currently generating about -0.01 per unit of risk. If you would invest  112,400  in Monks Investment Trust on September 4, 2024 and sell it today you would earn a total of  15,400  from holding Monks Investment Trust or generate 13.7% return on investment over 90 days.

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

Monks Investment Trust  vs.  Albion Technology General

Monks Investment Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Monks Investment Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Monks Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Albion Technology General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albion Technology General has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Albion Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Monks Investment and Albion Technology

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

The idea behind Monks Investment Trust and Albion Technology General 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.