Correlation Between Brunner Investment and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Brunner 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 Brunner 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 Brunner Investment Trust and Virgin Wines UK, you can compare the effects of market volatilities on Brunner 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 Brunner Investment with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunner Investment and Virgin Wines.
Diversification Opportunities for Brunner Investment and Virgin Wines
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brunner and Virgin is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Brunner 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 Brunner 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 Brunner 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 Brunner Investment i.e., Brunner Investment and Virgin Wines go up and down completely randomly.
Pair Corralation between Brunner Investment and Virgin Wines
Assuming the 90 days trading horizon Brunner Investment Trust is expected to generate 2.38 times more return on investment than Virgin Wines. However, Brunner Investment is 2.38 times more volatile than Virgin Wines UK. It trades about 0.12 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.12 per unit of risk. If you would invest 141,500 in Brunner Investment Trust on September 1, 2024 and sell it today you would earn a total of 4,500 from holding Brunner Investment Trust or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Brunner Investment Trust vs. Virgin Wines UK
Performance |
| Timeline |
| Brunner Investment Trust |
| Virgin Wines UK |
Brunner Investment and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunner Investment and Virgin Wines
The main advantage of trading using opposite Brunner Investment and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunner 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.| Brunner Investment vs. Samsung Electronics Co | Brunner Investment vs. Virgin Wines UK | Brunner Investment vs. Air Products Chemicals | Brunner Investment vs. Hansa Investment |
| Virgin Wines vs. GreenX Metals | Virgin Wines vs. Batm Advanced Communications | Virgin Wines vs. SBM Offshore NV | Virgin Wines vs. Zoom Video Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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