Correlation Between Naked Wines and Alabama Aircraft
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Alabama Aircraft 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 Naked Wines and Alabama Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Alabama Aircraft Industries, you can compare the effects of market volatilities on Naked Wines and Alabama Aircraft 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 Naked Wines with a short position of Alabama Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Alabama Aircraft.
Diversification Opportunities for Naked Wines and Alabama Aircraft
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Naked and Alabama is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Alabama Aircraft Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alabama Aircraft Ind and Naked Wines 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 Naked Wines plc are associated (or correlated) with Alabama Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alabama Aircraft Ind has no effect on the direction of Naked Wines i.e., Naked Wines and Alabama Aircraft go up and down completely randomly.
Pair Corralation between Naked Wines and Alabama Aircraft
If you would invest 252.00 in Naked Wines plc on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Naked Wines plc or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Naked Wines plc vs. Alabama Aircraft Industries
Performance |
| Timeline |
| Naked Wines plc |
| Alabama Aircraft Ind |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Naked Wines and Alabama Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Alabama Aircraft
The main advantage of trading using opposite Naked Wines and Alabama Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Alabama Aircraft 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 Alabama Aircraft will offset losses from the drop in Alabama Aircraft's long position.| Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Naked Wines plc | Naked Wines vs. Crimson Wine | Naked Wines vs. Brown Forman |
| Alabama Aircraft vs. RBC Bearings Incorporated | Alabama Aircraft vs. Treasury Wine Estates | Alabama Aircraft vs. Naked Wines plc | Alabama Aircraft vs. Merit Medical Systems |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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