Correlation Between Via Varejo and Diageo PLC
Can any of the company-specific risk be diversified away by investing in both Via Varejo and Diageo PLC 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 Via Varejo and Diageo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Varejo SA and Diageo PLC ADR, you can compare the effects of market volatilities on Via Varejo and Diageo PLC 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 Via Varejo with a short position of Diageo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Varejo and Diageo PLC.
Diversification Opportunities for Via Varejo and Diageo PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Via and Diageo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Via Varejo SA and Diageo PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diageo PLC ADR and Via Varejo 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 Via Varejo SA are associated (or correlated) with Diageo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diageo PLC ADR has no effect on the direction of Via Varejo i.e., Via Varejo and Diageo PLC go up and down completely randomly.
Pair Corralation between Via Varejo and Diageo PLC
If you would invest 11,968 in Diageo PLC ADR on September 13, 2024 and sell it today you would earn a total of 993.00 from holding Diageo PLC ADR or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Via Varejo SA vs. Diageo PLC ADR
Performance |
| Timeline |
| Via Varejo SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Diageo PLC ADR |
Via Varejo and Diageo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Varejo and Diageo PLC
The main advantage of trading using opposite Via Varejo and Diageo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Varejo position performs unexpectedly, Diageo PLC 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 Diageo PLC will offset losses from the drop in Diageo PLC's long position.| Via Varejo vs. Insteel Industries | Via Varejo vs. Tianjin Capital Environmental | Via Varejo vs. Amgen Inc | Via Varejo vs. RadNet Inc |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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