Correlation Between ARDAGH METAL and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and NAKED WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and NAKED WINES PLC, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and NAKED WINES.
Diversification Opportunities for ARDAGH METAL and NAKED WINES
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARDAGH and NAKED is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and NAKED WINES go up and down completely randomly.
Pair Corralation between ARDAGH METAL and NAKED WINES
Assuming the 90 days horizon ARDAGH METAL is expected to generate 2.29 times less return on investment than NAKED WINES. But when comparing it to its historical volatility, ARDAGH METAL PACDL 0001 is 1.19 times less risky than NAKED WINES. It trades about 0.03 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 44.00 in NAKED WINES PLC on September 5, 2024 and sell it today you would earn a total of 15.00 from holding NAKED WINES PLC or generate 34.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. NAKED WINES PLC
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| NAKED WINES PLC |
ARDAGH METAL and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and NAKED WINES
The main advantage of trading using opposite ARDAGH METAL and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. Corporate Office Properties | ARDAGH METAL vs. Regions Financial | ARDAGH METAL vs. INVITATION HOMES DL | ARDAGH METAL vs. LGI Homes |
| NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech |
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 CEOs Directory module to screen CEOs from public companies around the world.
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