Correlation Between MOL Hungarian and Naked Wines
Can any of the company-specific risk be diversified away by investing in both MOL Hungarian 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 MOL Hungarian and Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOL Hungarian Oil and Naked Wines plc, you can compare the effects of market volatilities on MOL Hungarian 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 MOL Hungarian with a short position of Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL Hungarian and Naked Wines.
Diversification Opportunities for MOL Hungarian and Naked Wines
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between MOL and Naked is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding MOL Hungarian Oil 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 MOL Hungarian 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 MOL Hungarian Oil 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 MOL Hungarian i.e., MOL Hungarian and Naked Wines go up and down completely randomly.
Pair Corralation between MOL Hungarian and Naked Wines
Assuming the 90 days trading horizon MOL Hungarian Oil is expected to generate 0.52 times more return on investment than Naked Wines. However, MOL Hungarian Oil is 1.92 times less risky than Naked Wines. It trades about 0.01 of its potential returns per unit of risk. Naked Wines plc is currently generating about 0.0 per unit of risk. If you would invest 292,200 in MOL Hungarian Oil on November 6, 2024 and sell it today you would earn a total of 0.00 from holding MOL Hungarian Oil or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOL Hungarian Oil vs. Naked Wines plc
Performance |
| Timeline |
| MOL Hungarian Oil |
| Naked Wines plc |
MOL Hungarian and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOL Hungarian and Naked Wines
The main advantage of trading using opposite MOL Hungarian and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOL Hungarian 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.| MOL Hungarian vs. BW Offshore | MOL Hungarian vs. Kinnevik Investment AB | MOL Hungarian vs. JPMorgan Japanese Investment | MOL Hungarian vs. Qurate Retail Series |
| Naked Wines vs. Albion Technology General | Naked Wines vs. Software Circle plc | Naked Wines vs. Ashtead Technology Holdings | Naked Wines vs. Check Point Software |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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