Correlation Between Camellia Plc and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Camellia Plc 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 Camellia Plc and Virgin Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Plc and Virgin Wines UK, you can compare the effects of market volatilities on Camellia Plc 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 Camellia Plc with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Plc and Virgin Wines.
Diversification Opportunities for Camellia Plc and Virgin Wines
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Camellia and Virgin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Plc 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 Camellia Plc 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 Camellia Plc 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 Camellia Plc i.e., Camellia Plc and Virgin Wines go up and down completely randomly.
Pair Corralation between Camellia Plc and Virgin Wines
Assuming the 90 days trading horizon Camellia Plc is expected to generate 0.99 times more return on investment than Virgin Wines. However, Camellia Plc is 1.01 times less risky than Virgin Wines. It trades about -0.08 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.24 per unit of risk. If you would invest 446,000 in Camellia Plc on September 4, 2024 and sell it today you would lose (6,000) from holding Camellia Plc or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Plc vs. Virgin Wines UK
Performance |
| Timeline |
| Camellia Plc |
| Virgin Wines UK |
Camellia Plc and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Plc and Virgin Wines
The main advantage of trading using opposite Camellia Plc and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Plc 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.| Camellia Plc vs. CompuGroup Medical AG | Camellia Plc vs. Broadridge Financial Solutions | Camellia Plc vs. Zegona Communications Plc | Camellia Plc vs. Molson Coors Beverage |
| Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Hyundai Motor | Virgin Wines vs. Toyota Motor Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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