Correlation Between NAKED WINES and ZIM Integrated
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and ZIM Integrated 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 ZIM Integrated 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 ZIM Integrated Shipping, you can compare the effects of market volatilities on NAKED WINES and ZIM Integrated 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 ZIM Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and ZIM Integrated.
Diversification Opportunities for NAKED WINES and ZIM Integrated
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between NAKED and ZIM is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and ZIM Integrated Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIM Integrated Shipping 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 ZIM Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIM Integrated Shipping has no effect on the direction of NAKED WINES i.e., NAKED WINES and ZIM Integrated go up and down completely randomly.
Pair Corralation between NAKED WINES and ZIM Integrated
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 0.5 times more return on investment than ZIM Integrated. However, NAKED WINES PLC is 1.99 times less risky than ZIM Integrated. It trades about 0.12 of its potential returns per unit of risk. ZIM Integrated Shipping is currently generating about -0.06 per unit of risk. If you would invest 61.00 in NAKED WINES PLC on September 13, 2024 and sell it today you would earn a total of 4.00 from holding NAKED WINES PLC or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. ZIM Integrated Shipping
Performance |
| Timeline |
| NAKED WINES PLC |
| ZIM Integrated Shipping |
NAKED WINES and ZIM Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and ZIM Integrated
The main advantage of trading using opposite NAKED WINES and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, ZIM Integrated 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 ZIM Integrated will offset losses from the drop in ZIM Integrated's long position.| NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. SIVERS SEMICONDUCTORS AB | NAKED WINES vs. CHINA HUARONG ENERHD 50 |
| ZIM Integrated vs. United Internet AG | ZIM Integrated vs. Laureate Education | ZIM Integrated vs. Xinhua Winshare Publishing | ZIM Integrated vs. G8 EDUCATION |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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