Correlation Between Bankers Investment and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Bankers Investment and Virgin 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 Bankers Investment and Virgin Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Virgin Wines UK, you can compare the effects of market volatilities on Bankers Investment and Virgin 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 Bankers Investment with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Virgin Wines.
Diversification Opportunities for Bankers Investment and Virgin Wines
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bankers and Virgin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Virgin Wines UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Wines UK and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Virgin Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Wines UK has no effect on the direction of Bankers Investment i.e., Bankers Investment and Virgin Wines go up and down completely randomly.
Pair Corralation between Bankers Investment and Virgin Wines
Assuming the 90 days trading horizon Bankers Investment Trust is expected to under-perform the Virgin Wines. But the fund apears to be less risky and, when comparing its historical volatility, Bankers Investment Trust is 3.71 times less risky than Virgin Wines. The fund trades about -0.12 of its potential returns per unit of risk. The Virgin Wines UK is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 3,050 in Virgin Wines UK on December 1, 2024 and sell it today you would earn a total of 950.00 from holding Virgin Wines UK or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Virgin Wines UK
Performance |
| Timeline |
| Bankers Investment Trust |
| Virgin Wines UK |
Bankers Investment and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Virgin Wines
The main advantage of trading using opposite Bankers Investment and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment position performs unexpectedly, Virgin 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 Virgin Wines will offset losses from the drop in Virgin Wines' long position.| Bankers Investment vs. Brunner Investment Trust | Bankers Investment vs. Schroder Asian Alpha | Bankers Investment vs. Artemisome I | Bankers Investment vs. iShares Continental European |
| Virgin Wines vs. New Residential Investment | Virgin Wines vs. Endeavour Mining Corp | Virgin Wines vs. iShares Physical Silver | Virgin Wines vs. Griffin Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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