Correlation Between Iconic Brands and Aristocrat Group
Can any of the company-specific risk be diversified away by investing in both Iconic Brands and Aristocrat Group 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 Iconic Brands and Aristocrat Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iconic Brands and Aristocrat Group Corp, you can compare the effects of market volatilities on Iconic Brands and Aristocrat Group 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 Iconic Brands with a short position of Aristocrat Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iconic Brands and Aristocrat Group.
Diversification Opportunities for Iconic Brands and Aristocrat Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Iconic and Aristocrat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Iconic Brands and Aristocrat Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Group Corp and Iconic Brands 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 Iconic Brands are associated (or correlated) with Aristocrat Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Group Corp has no effect on the direction of Iconic Brands i.e., Iconic Brands and Aristocrat Group go up and down completely randomly.
Pair Corralation between Iconic Brands and Aristocrat Group
Given the investment horizon of 90 days Iconic Brands is expected to generate 2.01 times more return on investment than Aristocrat Group. However, Iconic Brands is 2.01 times more volatile than Aristocrat Group Corp. It trades about 0.11 of its potential returns per unit of risk. Aristocrat Group Corp is currently generating about 0.09 per unit of risk. If you would invest 13.00 in Iconic Brands on August 28, 2024 and sell it today you would lose (12.99) from holding Iconic Brands or give up 99.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iconic Brands vs. Aristocrat Group Corp
Performance |
| Timeline |
| Iconic Brands |
| Aristocrat Group Corp |
Iconic Brands and Aristocrat Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iconic Brands and Aristocrat Group
The main advantage of trading using opposite Iconic Brands and Aristocrat Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iconic Brands position performs unexpectedly, Aristocrat Group 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 Aristocrat Group will offset losses from the drop in Aristocrat Group's long position.| Iconic Brands vs. Aristocrat Group Corp | Iconic Brands vs. Becle SA de | Iconic Brands vs. Naked Wines plc | Iconic Brands vs. Willamette Valley Vineyards |
| Aristocrat Group vs. Embotelladora Andina SA | Aristocrat Group vs. Signet International Holdings | Aristocrat Group vs. National Beverage Corp | Aristocrat Group vs. PT Astra International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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