Correlation Between VIVA WINE and Digilife Technologies
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and Digilife Technologies 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 Digilife Technologies 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 Digilife Technologies Limited, you can compare the effects of market volatilities on VIVA WINE and Digilife Technologies 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 Digilife Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Digilife Technologies.
Diversification Opportunities for VIVA WINE and Digilife Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIVA and Digilife is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Digilife Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digilife Technologies 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 Digilife Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digilife Technologies has no effect on the direction of VIVA WINE i.e., VIVA WINE and Digilife Technologies go up and down completely randomly.
Pair Corralation between VIVA WINE and Digilife Technologies
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 0.88 times more return on investment than Digilife Technologies. However, VIVA WINE GROUP is 1.14 times less risky than Digilife Technologies. It trades about -0.13 of its potential returns per unit of risk. Digilife Technologies Limited is currently generating about -0.21 per unit of risk. If you would invest 343.00 in VIVA WINE GROUP on October 14, 2024 and sell it today you would lose (12.00) from holding VIVA WINE GROUP or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Digilife Technologies Limited
Performance |
| Timeline |
| VIVA WINE GROUP |
| Digilife Technologies |
VIVA WINE and Digilife Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Digilife Technologies
The main advantage of trading using opposite VIVA WINE and Digilife Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, Digilife Technologies 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 Digilife Technologies will offset losses from the drop in Digilife Technologies' long position.| VIVA WINE vs. Seven West Media | VIVA WINE vs. SCOTT TECHNOLOGY | VIVA WINE vs. Townsquare Media | VIVA WINE vs. Micron Technology |
| Digilife Technologies vs. VIVA WINE GROUP | Digilife Technologies vs. Harmony Gold Mining | Digilife Technologies vs. URBAN OUTFITTERS | Digilife Technologies vs. NAKED WINES 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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