Correlation Between VIVA WINE and Adyen NV
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and Adyen NV 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 VIVA WINE and Adyen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Adyen NV, you can compare the effects of market volatilities on VIVA WINE and Adyen NV 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 VIVA WINE with a short position of Adyen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Adyen NV.
Diversification Opportunities for VIVA WINE and Adyen NV
Weak diversification
The 3 months correlation between VIVA and Adyen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Adyen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adyen NV and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with Adyen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adyen NV has no effect on the direction of VIVA WINE i.e., VIVA WINE and Adyen NV go up and down completely randomly.
Pair Corralation between VIVA WINE and Adyen NV
Assuming the 90 days horizon VIVA WINE is expected to generate 1.25 times less return on investment than Adyen NV. But when comparing it to its historical volatility, VIVA WINE GROUP is 2.1 times less risky than Adyen NV. It trades about 0.2 of its potential returns per unit of risk. Adyen NV is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 156,380 in Adyen NV on December 1, 2024 and sell it today you would earn a total of 12,700 from holding Adyen NV or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Adyen NV
Performance |
| Timeline |
| VIVA WINE GROUP |
| Adyen NV |
VIVA WINE and Adyen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Adyen NV
The main advantage of trading using opposite VIVA WINE and Adyen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, Adyen NV 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 Adyen NV will offset losses from the drop in Adyen NV's long position.| VIVA WINE vs. China Modern Dairy | VIVA WINE vs. SENECA FOODS A | VIVA WINE vs. PATTIES FOODS | VIVA WINE vs. Sunny Optical Technology |
| Adyen NV vs. New Residential Investment | Adyen NV vs. REGAL ASIAN INVESTMENTS | Adyen NV vs. ECHO INVESTMENT ZY | Adyen NV vs. CHRYSALIS INVESTMENTS LTD |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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