Correlation Between Bet At and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Bet At and Virgin 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 Bet At and Virgin Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between bet at home AG and Virgin Wines UK, you can compare the effects of market volatilities on Bet At and Virgin 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 Bet At with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Virgin Wines.
Diversification Opportunities for Bet At and Virgin Wines
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bet and Virgin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Virgin Wines UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Wines UK and Bet At 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 bet at home AG are associated (or correlated) with Virgin Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Wines UK has no effect on the direction of Bet At i.e., Bet At and Virgin Wines go up and down completely randomly.
Pair Corralation between Bet At and Virgin Wines
Assuming the 90 days trading horizon bet at home AG is expected to under-perform the Virgin Wines. In addition to that, Bet At is 1.45 times more volatile than Virgin Wines UK. It trades about -0.05 of its total potential returns per unit of risk. Virgin Wines UK is currently generating about -0.03 per unit of volatility. If you would invest 5,550 in Virgin Wines UK on October 11, 2024 and sell it today you would lose (2,250) from holding Virgin Wines UK or give up 40.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
bet at home AG vs. Virgin Wines UK
Performance |
| Timeline |
| bet at home |
| Virgin Wines UK |
Bet At and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bet At and Virgin Wines
The main advantage of trading using opposite Bet At and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At position performs unexpectedly, Virgin 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 Virgin Wines will offset losses from the drop in Virgin Wines' long position.| Bet At vs. Accesso Technology Group | Bet At vs. Alfa Financial Software | Bet At vs. Beazer Homes USA | Bet At vs. International Biotechnology Trust |
| Virgin Wines vs. Live Nation Entertainment | Virgin Wines vs. Arrow Electronics | Virgin Wines vs. LBG Media PLC | Virgin Wines vs. JD Sports Fashion |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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