Correlation Between Livermore Investments and Virgin Wines

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Livermore 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 Livermore 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 Livermore Investments Group and Virgin Wines UK, you can compare the effects of market volatilities on Livermore 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 Livermore Investments with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livermore Investments and Virgin Wines.

Diversification Opportunities for Livermore Investments and Virgin Wines

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Livermore and Virgin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Livermore 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 Livermore 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 Livermore 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 Livermore Investments i.e., Livermore Investments and Virgin Wines go up and down completely randomly.

Pair Corralation between Livermore Investments and Virgin Wines

Assuming the 90 days trading horizon Livermore Investments is expected to generate 1.34 times less return on investment than Virgin Wines. But when comparing it to its historical volatility, Livermore Investments Group is 1.19 times less risky than Virgin Wines. It trades about 0.18 of its potential returns per unit of risk. Virgin Wines UK is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,300  in Virgin Wines UK on December 11, 2024 and sell it today you would earn a total of  900.00  from holding Virgin Wines UK or generate 27.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Livermore Investments Group  vs.  Virgin Wines UK

 Performance 
       Timeline  
Livermore Investments 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Livermore Investments Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Livermore Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.
Virgin Wines UK 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Virgin Wines UK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Virgin Wines unveiled solid returns over the last few months and may actually be approaching a breakup point.

Livermore Investments and Virgin Wines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Livermore Investments and Virgin Wines

The main advantage of trading using opposite Livermore Investments and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livermore 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.
The idea behind Livermore Investments Group and Virgin Wines UK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Fundamental Analysis
View fundamental data based on most recent published financial statements
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios