Correlation Between Naked Wines and Integral
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Integral 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 Integral 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 Integral Ad Science, you can compare the effects of market volatilities on Naked Wines and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Integral.
Diversification Opportunities for Naked Wines and Integral
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Naked and Integral is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Naked Wines i.e., Naked Wines and Integral go up and down completely randomly.
Pair Corralation between Naked Wines and Integral
Assuming the 90 days horizon Naked Wines plc is expected to under-perform the Integral. In addition to that, Naked Wines is 1.99 times more volatile than Integral Ad Science. It trades about -0.22 of its total potential returns per unit of risk. Integral Ad Science is currently generating about 0.0 per unit of volatility. If you would invest 1,058 in Integral Ad Science on November 2, 2024 and sell it today you would lose (7.00) from holding Integral Ad Science or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Naked Wines plc vs. Integral Ad Science
Performance |
| Timeline |
| Naked Wines plc |
| Integral Ad Science |
Naked Wines and Integral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Integral
The main advantage of trading using opposite Naked Wines and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral'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 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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