Correlation Between ITALIAN WINE and Media
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on ITALIAN WINE and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Media.
Diversification Opportunities for ITALIAN WINE and Media
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ITALIAN and Media is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and Media go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Media
Assuming the 90 days horizon ITALIAN WINE is expected to generate 10.72 times less return on investment than Media. But when comparing it to its historical volatility, ITALIAN WINE BRANDS is 2.14 times less risky than Media. It trades about 0.02 of its potential returns per unit of risk. Media and Games is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 99.00 in Media and Games on September 4, 2024 and sell it today you would earn a total of 254.00 from holding Media and Games or generate 256.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Media and Games
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Media and Games |
ITALIAN WINE and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Media
The main advantage of trading using opposite ITALIAN WINE and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
| Media vs. Rocket Internet SE | Media vs. Superior Plus Corp | Media vs. NMI Holdings | Media vs. Origin Agritech |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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