Correlation Between Naked Wines and Global Net
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Naked Wines and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Global Net.
Diversification Opportunities for Naked Wines and Global Net
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Naked and Global is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Naked Wines i.e., Naked Wines and Global Net go up and down completely randomly.
Pair Corralation between Naked Wines and Global Net
Assuming the 90 days horizon Naked Wines plc is expected to generate 7.1 times more return on investment than Global Net. However, Naked Wines is 7.1 times more volatile than Global Net Lease. It trades about 0.06 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.06 per unit of risk. If you would invest 145.00 in Naked Wines plc on December 12, 2024 and sell it today you would earn a total of 195.00 from holding Naked Wines plc or generate 134.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.63% |
| Values | Daily Returns |
Naked Wines plc vs. Global Net Lease
Performance |
| Timeline |
| Naked Wines plc |
| Global Net Lease |
Naked Wines and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Global Net
The main advantage of trading using opposite Naked Wines and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net'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 |
| Global Net vs. National Vision Holdings | ||
| Global Net vs. Alphatec Holdings | ||
| Global Net vs. Estee Lauder Companies | ||
| Global Net vs. Cytek Biosciences |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |