Correlation Between Naked Wines and Citizens
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Citizens 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 Citizens 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 Citizens, you can compare the effects of market volatilities on Naked Wines and Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Citizens.
Diversification Opportunities for Naked Wines and Citizens
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Citizens is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Naked Wines i.e., Naked Wines and Citizens go up and down completely randomly.
Pair Corralation between Naked Wines and Citizens
If you would invest 271.00 in Naked Wines plc on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Naked Wines plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Naked Wines plc vs. Citizens
Performance |
| Timeline |
| Naked Wines plc |
| Citizens |
Naked Wines and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Citizens
The main advantage of trading using opposite Naked Wines and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Naked Wines vs. Diageo PLC ADR | Naked Wines vs. Constellation Brands Class | Naked Wines vs. Brown Forman | Naked Wines vs. Thai Beverage PCL |
| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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