Correlation Between Shipping and Silly Monks

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

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

Diversification Opportunities for Shipping and Silly Monks

0.72

Correlation Coefficient

Shipping  Silly Monks

Poor diversification

The 3 months correlation between Shipping and Silly is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shipping and Silly Monks Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silly Monks Entertainment and Shipping 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 Shipping are associated (or correlated) with Silly Monks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silly Monks Entertainment has no effect on the direction of Shipping i.e., Shipping and Silly Monks go up and down completely randomly.

Pair Corralation between Shipping and Silly Monks

Assuming the 90 days trading horizon Shipping is expected to under-perform the Silly Monks. In addition to that, Shipping is 1.04 times more volatile than Silly Monks Entertainment. It trades about -0.06 of its total potential returns per unit of risk. Silly Monks Entertainment is currently generating about -0.07 per unit of volatility. If you would invest  2,500  in Silly Monks Entertainment on September 3, 2024 and sell it today you would lose (323.00) from holding Silly Monks Entertainment or give up 12.92% of portfolio value over 90 days.

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

Shipping  vs.  Silly Monks Entertainment

Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Silly Monks Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silly Monks Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Shipping and Silly Monks

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

The idea behind Shipping and Silly Monks Entertainment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.