Correlation Between Naked Wines and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on Naked Wines and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Dalata Hotel.
Diversification Opportunities for Naked Wines and Dalata Hotel
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Dalata is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Naked Wines i.e., Naked Wines and Dalata Hotel go up and down completely randomly.
Pair Corralation between Naked Wines and Dalata Hotel
Assuming the 90 days horizon Naked Wines is expected to generate 1.65 times less return on investment than Dalata Hotel. In addition to that, Naked Wines is 3.32 times more volatile than Dalata Hotel Group. It trades about 0.01 of its total potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.04 per unit of volatility. If you would invest 336.00 in Dalata Hotel Group on September 12, 2024 and sell it today you would earn a total of 152.00 from holding Dalata Hotel Group or generate 45.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Naked Wines plc vs. Dalata Hotel Group
Performance |
| Timeline |
| Naked Wines plc |
| Dalata Hotel Group |
Naked Wines and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Dalata Hotel
The main advantage of trading using opposite Naked Wines and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel'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 |
| Dalata Hotel vs. Keurig Dr Pepper | Dalata Hotel vs. Willamette Valley Vineyards | Dalata Hotel vs. Molson Coors Brewing | Dalata Hotel 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |