Correlation Between FIRST SAVINGS and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS 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 FIRST SAVINGS and NAKED WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SAVINGS FINL and NAKED WINES PLC, you can compare the effects of market volatilities on FIRST SAVINGS 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 FIRST SAVINGS with a short position of NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and NAKED WINES.
Diversification Opportunities for FIRST SAVINGS and NAKED WINES
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FIRST and NAKED is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL 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 FIRST SAVINGS 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 FIRST SAVINGS FINL 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 FIRST SAVINGS i.e., FIRST SAVINGS and NAKED WINES go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and NAKED WINES
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to under-perform the NAKED WINES. But the stock apears to be less risky and, when comparing its historical volatility, FIRST SAVINGS FINL is 1.79 times less risky than NAKED WINES. The stock trades about -0.25 of its potential returns per unit of risk. The NAKED WINES PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 53.00 in NAKED WINES PLC on November 1, 2024 and sell it today you would lose (2.00) from holding NAKED WINES PLC or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. NAKED WINES PLC
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| NAKED WINES PLC |
FIRST SAVINGS and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and NAKED WINES
The main advantage of trading using opposite FIRST SAVINGS and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS 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.| FIRST SAVINGS vs. AIR PRODCHEMICALS | FIRST SAVINGS vs. TIANDE CHEMICAL | FIRST SAVINGS vs. X FAB Silicon Foundries | FIRST SAVINGS vs. LPKF Laser Electronics |
| NAKED WINES vs. CHRYSALIS INVESTMENTS LTD | NAKED WINES vs. FIRST SAVINGS FINL | NAKED WINES vs. CITY OFFICE REIT | NAKED WINES vs. CENTURIA OFFICE REIT |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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