Correlation Between Monsenso and LED IBond

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Can any of the company-specific risk be diversified away by investing in both Monsenso and LED IBond 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 Monsenso and LED IBond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monsenso AS and LED iBond International, you can compare the effects of market volatilities on Monsenso and LED IBond 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 Monsenso with a short position of LED IBond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monsenso and LED IBond.

Diversification Opportunities for Monsenso and LED IBond

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Monsenso and LED is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Monsenso AS and LED iBond International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LED iBond International and Monsenso 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 Monsenso AS are associated (or correlated) with LED IBond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LED iBond International has no effect on the direction of Monsenso i.e., Monsenso and LED IBond go up and down completely randomly.

Pair Corralation between Monsenso and LED IBond

Assuming the 90 days trading horizon Monsenso AS is expected to generate 0.58 times more return on investment than LED IBond. However, Monsenso AS is 1.71 times less risky than LED IBond. It trades about 0.08 of its potential returns per unit of risk. LED iBond International is currently generating about -0.02 per unit of risk. If you would invest  26.00  in Monsenso AS on April 24, 2025 and sell it today you would earn a total of  2.00  from holding Monsenso AS or generate 7.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Monsenso AS  vs.  LED iBond International

 Performance 
       Timeline  
Monsenso AS 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Monsenso AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Monsenso exhibited solid returns over the last few months and may actually be approaching a breakup point.
LED iBond International 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in LED iBond International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, LED IBond displayed solid returns over the last few months and may actually be approaching a breakup point.

Monsenso and LED IBond Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Monsenso and LED IBond

The main advantage of trading using opposite Monsenso and LED IBond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monsenso position performs unexpectedly, LED IBond 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 LED IBond will offset losses from the drop in LED IBond's long position.
The idea behind Monsenso AS and LED iBond International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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