Correlation Between Naked Wines and FTAC Emerald
Can any of the company-specific risk be diversified away by investing in both Naked Wines and FTAC Emerald 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 FTAC Emerald 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 FTAC Emerald Acquisition, you can compare the effects of market volatilities on Naked Wines and FTAC Emerald 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 FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and FTAC Emerald.
Diversification Opportunities for Naked Wines and FTAC Emerald
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Naked and FTAC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and FTAC Emerald Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAC Emerald Acquisition 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 FTAC Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAC Emerald Acquisition has no effect on the direction of Naked Wines i.e., Naked Wines and FTAC Emerald go up and down completely randomly.
Pair Corralation between Naked Wines and FTAC Emerald
Assuming the 90 days horizon Naked Wines plc is expected to under-perform the FTAC Emerald. In addition to that, Naked Wines is 1.2 times more volatile than FTAC Emerald Acquisition. It trades about -0.23 of its total potential returns per unit of risk. FTAC Emerald Acquisition is currently generating about 0.07 per unit of volatility. If you would invest 1,095 in FTAC Emerald Acquisition on September 19, 2024 and sell it today you would earn a total of 15.00 from holding FTAC Emerald Acquisition or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naked Wines plc vs. FTAC Emerald Acquisition
Performance |
| Timeline |
| Naked Wines plc |
| FTAC Emerald Acquisition |
Naked Wines and FTAC Emerald Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and FTAC Emerald
The main advantage of trading using opposite Naked Wines and FTAC Emerald positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, FTAC Emerald 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 FTAC Emerald will offset losses from the drop in FTAC Emerald'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 |
| FTAC Emerald vs. Weyco Group | FTAC Emerald vs. Cedar Realty Trust | FTAC Emerald vs. Naked Wines plc | FTAC Emerald vs. Vita Coco |
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 CEOs Directory module to screen CEOs from public companies around the world.
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