Correlation Between VARIOUS EATERIES and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and NAKED WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and NAKED WINES PLC, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and NAKED WINES.
Diversification Opportunities for VARIOUS EATERIES and NAKED WINES
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VARIOUS and NAKED is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and NAKED WINES go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and NAKED WINES
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to generate 0.42 times more return on investment than NAKED WINES. However, VARIOUS EATERIES LS is 2.36 times less risky than NAKED WINES. It trades about -0.34 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.3 per unit of risk. If you would invest 20.00 in VARIOUS EATERIES LS on October 11, 2024 and sell it today you would lose (2.00) from holding VARIOUS EATERIES LS or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. NAKED WINES PLC
Performance |
| Timeline |
| VARIOUS EATERIES |
| NAKED WINES PLC |
VARIOUS EATERIES and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and NAKED WINES
The main advantage of trading using opposite VARIOUS EATERIES and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.| VARIOUS EATERIES vs. GREENX METALS LTD | VARIOUS EATERIES vs. Aya Gold Silver | VARIOUS EATERIES vs. GRIFFIN MINING LTD | VARIOUS EATERIES vs. ANGLO ASIAN MINING |
| NAKED WINES vs. Commercial Vehicle Group | NAKED WINES vs. MICRONIC MYDATA | NAKED WINES vs. VARIOUS EATERIES LS | NAKED WINES vs. ETFS Coffee ETC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Directory Find actively traded commodities issued by global exchanges |