Correlation Between ITALIAN WINE and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and Commercial Vehicle 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 ITALIAN WINE and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Commercial Vehicle Group, you can compare the effects of market volatilities on ITALIAN WINE and Commercial Vehicle 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 ITALIAN WINE with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Commercial Vehicle.
Diversification Opportunities for ITALIAN WINE and Commercial Vehicle
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ITALIAN and Commercial is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and Commercial Vehicle go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Commercial Vehicle
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Commercial Vehicle. In addition to that, ITALIAN WINE is 1.27 times more volatile than Commercial Vehicle Group. It trades about -0.16 of its total potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.14 per unit of volatility. If you would invest 222.00 in Commercial Vehicle Group on October 28, 2024 and sell it today you would lose (14.00) from holding Commercial Vehicle Group or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Commercial Vehicle Group
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Commercial Vehicle |
ITALIAN WINE and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Commercial Vehicle
The main advantage of trading using opposite ITALIAN WINE and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| ITALIAN WINE vs. HANOVER INSURANCE | ITALIAN WINE vs. CVS Health | ITALIAN WINE vs. CLOVER HEALTH INV | ITALIAN WINE vs. WESANA HEALTH HOLD |
| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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