Correlation Between Intuitive Investments and Naked Wines
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and Naked 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 Naked 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 Naked Wines plc, you can compare the effects of market volatilities on Intuitive Investments and Naked 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 Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Naked Wines.
Diversification Opportunities for Intuitive Investments and Naked Wines
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intuitive and Naked is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc 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 Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Naked Wines go up and down completely randomly.
Pair Corralation between Intuitive Investments and Naked Wines
Assuming the 90 days trading horizon Intuitive Investments Group is expected to under-perform the Naked Wines. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Investments Group is 2.57 times less risky than Naked Wines. The stock trades about -0.11 of its potential returns per unit of risk. The Naked Wines plc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,060 in Naked Wines plc on December 11, 2024 and sell it today you would earn a total of 540.00 from holding Naked Wines plc or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. Naked Wines plc
Performance |
| Timeline |
| Intuitive Investments |
| Naked Wines plc |
Intuitive Investments and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and Naked Wines
The main advantage of trading using opposite Intuitive Investments and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments position performs unexpectedly, Naked 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 Naked Wines will offset losses from the drop in Naked Wines' long position.| Intuitive Investments vs. Charter Communications Cl | Intuitive Investments vs. mobilezone holding AG | Intuitive Investments vs. Spirent Communications plc | Intuitive Investments vs. Global Net Lease |
| Naked Wines vs. Mineral Financial Investments | Naked Wines vs. Orascom Investment Holding | Naked Wines vs. Gear4music Plc | Naked Wines vs. Software Circle plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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