Correlation Between Basic Energy and Monde Nissin

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

By analyzing existing cross correlation between Basic Energy Corp and Monde Nissin Corp, you can compare the effects of market volatilities on Basic Energy and Monde Nissin 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 Basic Energy with a short position of Monde Nissin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Energy and Monde Nissin.

Diversification Opportunities for Basic Energy and Monde Nissin

-0.08

Correlation Coefficient

Basic Energy  Monde Nissin

Good diversification

The 3 months correlation between Basic and Monde is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Basic Energy Corp and Monde Nissin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monde Nissin Corp and Basic Energy 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 Basic Energy Corp are associated (or correlated) with Monde Nissin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monde Nissin Corp has no effect on the direction of Basic Energy i.e., Basic Energy and Monde Nissin go up and down completely randomly.

Pair Corralation between Basic Energy and Monde Nissin

Assuming the 90 days trading horizon Basic Energy is expected to generate 1.3 times less return on investment than Monde Nissin. In addition to that, Basic Energy is 1.68 times more volatile than Monde Nissin Corp. It trades about 0.02 of its total potential returns per unit of risk. Monde Nissin Corp is currently generating about 0.05 per unit of volatility. If you would invest  711.00  in Monde Nissin Corp on April 24, 2025 and sell it today you would earn a total of  39.00  from holding Monde Nissin Corp or generate 5.49% return on investment over 90 days.

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

Basic Energy Corp  vs.  Monde Nissin Corp

Basic Energy Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Basic Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Basic Energy is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Monde Nissin Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Monde Nissin Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Monde Nissin may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Basic Energy and Monde Nissin

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

The idea behind Basic Energy Corp and Monde Nissin Corp 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.