Correlation Between Chrysalis Investments and Monks Investment

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

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

Diversification Opportunities for Chrysalis Investments and Monks Investment

0.96

Correlation Coefficient

Chrysalis Investments  Monks Investment

Almost no diversification

The 3 months correlation between Chrysalis and Monks is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust and Chrysalis Investments 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 Chrysalis Investments are associated (or correlated) with Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of Chrysalis Investments i.e., Chrysalis Investments and Monks Investment go up and down completely randomly.

Pair Corralation between Chrysalis Investments and Monks Investment

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 1.04 times less return on investment than Monks Investment. In addition to that, Chrysalis Investments is 1.13 times more volatile than Monks Investment Trust. It trades about 0.27 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.32 per unit of volatility. If you would invest  107,200  in Monks Investment Trust on April 20, 2025 and sell it today you would earn a total of  24,800  from holding Monks Investment Trust or generate 23.13% return on investment over 90 days.

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

Chrysalis Investments  vs.  Monks Investment Trust

Chrysalis Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chrysalis Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Monks Investment Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Monks Investment Trust are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Monks Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chrysalis Investments and Monks Investment

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

The idea behind Chrysalis Investments and Monks Investment Trust 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.