Correlation Between Intuitive Investments and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments 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 Intuitive Investments and Virgin Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and Virgin Wines UK, you can compare the effects of market volatilities on Intuitive Investments 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 Intuitive Investments with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Virgin Wines.
Diversification Opportunities for Intuitive Investments and Virgin Wines
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Intuitive and Virgin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group 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 Intuitive Investments 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 Intuitive Investments Group 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 Intuitive Investments i.e., Intuitive Investments and Virgin Wines go up and down completely randomly.
Pair Corralation between Intuitive Investments and Virgin Wines
Assuming the 90 days trading horizon Intuitive Investments Group is expected to generate 1.02 times more return on investment than Virgin Wines. However, Intuitive Investments is 1.02 times more volatile than Virgin Wines UK. It trades about -0.17 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.27 per unit of risk. If you would invest 14,050 in Intuitive Investments Group on September 2, 2024 and sell it today you would lose (1,750) from holding Intuitive Investments Group or give up 12.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. Virgin Wines UK
Performance |
| Timeline |
| Intuitive Investments |
| Virgin Wines UK |
Intuitive Investments and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and Virgin Wines
The main advantage of trading using opposite Intuitive Investments and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments 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.| Intuitive Investments vs. Toyota Motor Corp | Intuitive Investments vs. SoftBank Group Corp | Intuitive Investments vs. OTP Bank Nyrt | Intuitive Investments vs. Las Vegas Sands |
| Virgin Wines vs. Coor Service Management | Virgin Wines vs. British American Tobacco | Virgin Wines vs. Liontrust Asset Management | Virgin Wines vs. Atalaya 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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