Correlation Between Intertek Group and Monotaro

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

By analyzing existing cross correlation between Intertek Group Plc and Monotaro Co, you can compare the effects of market volatilities on Intertek Group and Monotaro 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 Intertek Group with a short position of Monotaro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertek Group and Monotaro.

Diversification Opportunities for Intertek Group and Monotaro

-0.18

Correlation Coefficient

Intertek Group  Monotaro

Good diversification

The 3 months correlation between Intertek and Monotaro is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Intertek Group Plc and Monotaro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monotaro and Intertek Group 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 Intertek Group Plc are associated (or correlated) with Monotaro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monotaro has no effect on the direction of Intertek Group i.e., Intertek Group and Monotaro go up and down completely randomly.

Pair Corralation between Intertek Group and Monotaro

Assuming the 90 days horizon Intertek Group Plc is expected to generate 0.55 times more return on investment than Monotaro. However, Intertek Group Plc is 1.81 times less risky than Monotaro. It trades about 0.12 of its potential returns per unit of risk. Monotaro Co is currently generating about -0.07 per unit of risk. If you would invest  5,982  in Intertek Group Plc on May 1, 2025 and sell it today you would earn a total of  506.00  from holding Intertek Group Plc or generate 8.46% return on investment over 90 days.

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

Intertek Group Plc  vs.  Monotaro Co

Intertek Group Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intertek Group Plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Intertek Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Monotaro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monotaro Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Intertek Group and Monotaro

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

The idea behind Intertek Group Plc and Monotaro Co 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.