Correlation Between Lion Biotechnologies and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and VIVA WINE 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 Lion Biotechnologies and VIVA WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Biotechnologies and VIVA WINE GROUP, you can compare the effects of market volatilities on Lion Biotechnologies and VIVA WINE 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 Lion Biotechnologies with a short position of VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and VIVA WINE.
Diversification Opportunities for Lion Biotechnologies and VIVA WINE
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and VIVA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and VIVA WINE go up and down completely randomly.
Pair Corralation between Lion Biotechnologies and VIVA WINE
Assuming the 90 days trading horizon Lion Biotechnologies is expected to under-perform the VIVA WINE. In addition to that, Lion Biotechnologies is 3.45 times more volatile than VIVA WINE GROUP. It trades about -0.08 of its total potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.18 per unit of volatility. If you would invest 355.00 in VIVA WINE GROUP on August 31, 2024 and sell it today you would lose (22.00) from holding VIVA WINE GROUP or give up 6.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Biotechnologies vs. VIVA WINE GROUP
Performance |
| Timeline |
| Lion Biotechnologies |
| VIVA WINE GROUP |
Lion Biotechnologies and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Biotechnologies and VIVA WINE
The main advantage of trading using opposite Lion Biotechnologies and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc |
| VIVA WINE vs. Lion Biotechnologies | VIVA WINE vs. QURATE RETAIL INC | VIVA WINE vs. BJs Wholesale Club | VIVA WINE vs. ACCSYS TECHPLC EO |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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