Correlation Between VIVA WINE and Food Life
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and Food Life 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 Food Life 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 Food Life Companies, you can compare the effects of market volatilities on VIVA WINE and Food Life 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 Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Food Life.
Diversification Opportunities for VIVA WINE and Food Life
Pay attention - limited upside
The 3 months correlation between VIVA and Food is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies 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 Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of VIVA WINE i.e., VIVA WINE and Food Life go up and down completely randomly.
Pair Corralation between VIVA WINE and Food Life
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 2.11 times more return on investment than Food Life. However, VIVA WINE is 2.11 times more volatile than Food Life Companies. It trades about 0.06 of its potential returns per unit of risk. Food Life Companies is currently generating about 0.02 per unit of risk. If you would invest 124.00 in VIVA WINE GROUP on September 1, 2024 and sell it today you would earn a total of 209.00 from holding VIVA WINE GROUP or generate 168.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Food Life Companies
Performance |
| Timeline |
| VIVA WINE GROUP |
| Food Life Companies |
VIVA WINE and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Food Life
The main advantage of trading using opposite VIVA WINE and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| VIVA WINE vs. APPLIED MATERIALS | VIVA WINE vs. United Airlines Holdings | VIVA WINE vs. Nok Airlines PCL | VIVA WINE vs. Goodyear Tire Rubber |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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