Correlation Between VIRG NATL and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both VIRG NATL and Bunzl Plc 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 VIRG NATL and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIRG NATL BANKSH and Bunzl plc, you can compare the effects of market volatilities on VIRG NATL and Bunzl Plc 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 VIRG NATL with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRG NATL and Bunzl Plc.
Diversification Opportunities for VIRG NATL and Bunzl Plc
Good diversification
The 3 months correlation between VIRG and Bunzl is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding VIRG NATL BANKSH and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and VIRG NATL 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 VIRG NATL BANKSH are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of VIRG NATL i.e., VIRG NATL and Bunzl Plc go up and down completely randomly.
Pair Corralation between VIRG NATL and Bunzl Plc
Assuming the 90 days horizon VIRG NATL is expected to generate 11.52 times less return on investment than Bunzl Plc. In addition to that, VIRG NATL is 4.24 times more volatile than Bunzl plc. It trades about 0.0 of its total potential returns per unit of risk. Bunzl plc is currently generating about 0.21 per unit of volatility. If you would invest 4,088 in Bunzl plc on September 3, 2024 and sell it today you would earn a total of 166.00 from holding Bunzl plc or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIRG NATL BANKSH vs. Bunzl plc
Performance |
| Timeline |
| VIRG NATL BANKSH |
| Bunzl plc |
VIRG NATL and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIRG NATL and Bunzl Plc
The main advantage of trading using opposite VIRG NATL and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRG NATL position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.| VIRG NATL vs. Corporate Office Properties | VIRG NATL vs. WillScot Mobile Mini | VIRG NATL vs. Lion Biotechnologies | VIRG NATL vs. T MOBILE INCDL 00001 |
| Bunzl Plc vs. COMINTL BANK ADR1 | Bunzl Plc vs. Aozora Bank | Bunzl Plc vs. VIRG NATL BANKSH | Bunzl Plc vs. Zijin Mining Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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