Correlation Between CHRYSALIS INVESTMENTS and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS and NAKED WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHRYSALIS INVESTMENTS LTD and NAKED WINES PLC, you can compare the effects of market volatilities on CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS with a short position of NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRYSALIS INVESTMENTS and NAKED WINES.
Diversification Opportunities for CHRYSALIS INVESTMENTS and NAKED WINES
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHRYSALIS and NAKED is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CHRYSALIS INVESTMENTS LTD 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 CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS LTD 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 CHRYSALIS INVESTMENTS i.e., CHRYSALIS INVESTMENTS and NAKED WINES go up and down completely randomly.
Pair Corralation between CHRYSALIS INVESTMENTS and NAKED WINES
Assuming the 90 days horizon CHRYSALIS INVESTMENTS LTD is expected to generate 0.47 times more return on investment than NAKED WINES. However, CHRYSALIS INVESTMENTS LTD is 2.11 times less risky than NAKED WINES. It trades about 0.13 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.02 per unit of risk. If you would invest 105.00 in CHRYSALIS INVESTMENTS LTD on November 8, 2024 and sell it today you would earn a total of 15.00 from holding CHRYSALIS INVESTMENTS LTD or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHRYSALIS INVESTMENTS LTD vs. NAKED WINES PLC
Performance |
| Timeline |
| CHRYSALIS INVESTMENTS LTD |
| NAKED WINES PLC |
CHRYSALIS INVESTMENTS and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHRYSALIS INVESTMENTS and NAKED WINES
The main advantage of trading using opposite CHRYSALIS INVESTMENTS and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRYSALIS INVESTMENTS 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's long position.| CHRYSALIS INVESTMENTS vs. China Communications Services | CHRYSALIS INVESTMENTS vs. COMBA TELECOM SYST | CHRYSALIS INVESTMENTS vs. Cellnex Telecom SA | CHRYSALIS INVESTMENTS vs. Telecom Argentina SA |
| NAKED WINES vs. Iridium Communications | NAKED WINES vs. Ribbon Communications | NAKED WINES vs. Zoom Video Communications | NAKED WINES vs. China Communications Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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