Correlation Between Coor Service and Naked Wines
Can any of the company-specific risk be diversified away by investing in both Coor Service and Naked Wines 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 Coor Service and Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coor Service Management and Naked Wines plc, you can compare the effects of market volatilities on Coor Service and Naked Wines 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 Coor Service with a short position of Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and Naked Wines.
Diversification Opportunities for Coor Service and Naked Wines
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coor and Naked is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc and Coor Service 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 Coor Service Management are associated (or correlated) with Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of Coor Service i.e., Coor Service and Naked Wines go up and down completely randomly.
Pair Corralation between Coor Service and Naked Wines
Assuming the 90 days trading horizon Coor Service Management is expected to under-perform the Naked Wines. But the stock apears to be less risky and, when comparing its historical volatility, Coor Service Management is 1.42 times less risky than Naked Wines. The stock trades about -0.02 of its potential returns per unit of risk. The Naked Wines plc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,580 in Naked Wines plc on November 3, 2024 and sell it today you would lose (1,080) from holding Naked Wines plc or give up 16.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Coor Service Management vs. Naked Wines plc
Performance |
| Timeline |
| Coor Service Management |
| Naked Wines plc |
Coor Service and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coor Service and Naked Wines
The main advantage of trading using opposite Coor Service and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' long position.| Coor Service vs. Ubisoft Entertainment | Coor Service vs. XLMedia PLC | Coor Service vs. Liberty Media Corp | Coor Service vs. Hollywood Bowl Group |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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