Correlation Between Moncler SpA and VF

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

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

Diversification Opportunities for Moncler SpA and VF

-0.33

Correlation Coefficient

Moncler SpA  VF

Very good diversification

The 3 months correlation between Moncler and VF is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Moncler SpA and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation and Moncler SpA 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 Moncler SpA are associated (or correlated) with VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of Moncler SpA i.e., Moncler SpA and VF go up and down completely randomly.

Pair Corralation between Moncler SpA and VF

Assuming the 90 days horizon Moncler SpA is expected to generate 12.48 times less return on investment than VF. But when comparing it to its historical volatility, Moncler SpA is 1.99 times less risky than VF. It trades about 0.02 of its potential returns per unit of risk. VF Corporation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,541  in VF Corporation on September 13, 2024 and sell it today you would earn a total of  452.00  from holding VF Corporation or generate 29.33% return on investment over 90 days.

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

Moncler SpA  vs.  VF Corp.

Moncler SpA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Moncler SpA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

VF Corporation

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VF reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moncler SpA and VF

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

The idea behind Moncler SpA and VF Corporation 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.