Correlation Between MGP Ingredients and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both MGP Ingredients and ITALIAN WINE 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 MGP Ingredients and ITALIAN WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGP Ingredients and ITALIAN WINE BRANDS, you can compare the effects of market volatilities on MGP Ingredients and ITALIAN WINE 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 MGP Ingredients with a short position of ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGP Ingredients and ITALIAN WINE.
Diversification Opportunities for MGP Ingredients and ITALIAN WINE
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MGP and ITALIAN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MGP Ingredients and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS and MGP Ingredients 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 MGP Ingredients are associated (or correlated) with ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of MGP Ingredients i.e., MGP Ingredients and ITALIAN WINE go up and down completely randomly.
Pair Corralation between MGP Ingredients and ITALIAN WINE
Assuming the 90 days trading horizon MGP Ingredients is expected to under-perform the ITALIAN WINE. In addition to that, MGP Ingredients is 2.68 times more volatile than ITALIAN WINE BRANDS. It trades about -0.24 of its total potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about 0.1 per unit of volatility. If you would invest 2,150 in ITALIAN WINE BRANDS on August 29, 2024 and sell it today you would earn a total of 70.00 from holding ITALIAN WINE BRANDS or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGP Ingredients vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| MGP Ingredients |
| ITALIAN WINE BRANDS |
MGP Ingredients and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGP Ingredients and ITALIAN WINE
The main advantage of trading using opposite MGP Ingredients and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGP Ingredients position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.| MGP Ingredients vs. WisdomTree Investments | MGP Ingredients vs. ETFS Coffee ETC | MGP Ingredients vs. IMAGIN MEDICAL INC | MGP Ingredients vs. Microbot Medical |
| ITALIAN WINE vs. Merit Medical Systems | ITALIAN WINE vs. GOODYEAR T RUBBER | ITALIAN WINE vs. SCANDMEDICAL SOLDK 040 | ITALIAN WINE vs. Apollo Medical Holdings |
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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |