Correlation Between NAKED WINES and PACIFIC ONLINE
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and PACIFIC ONLINE 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 PACIFIC ONLINE 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 PACIFIC ONLINE, you can compare the effects of market volatilities on NAKED WINES and PACIFIC ONLINE 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 PACIFIC ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and PACIFIC ONLINE.
Diversification Opportunities for NAKED WINES and PACIFIC ONLINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NAKED and PACIFIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and PACIFIC ONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC ONLINE 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 PACIFIC ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC ONLINE has no effect on the direction of NAKED WINES i.e., NAKED WINES and PACIFIC ONLINE go up and down completely randomly.
Pair Corralation between NAKED WINES and PACIFIC ONLINE
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the PACIFIC ONLINE. In addition to that, NAKED WINES is 1.86 times more volatile than PACIFIC ONLINE. It trades about -0.01 of its total potential returns per unit of risk. PACIFIC ONLINE is currently generating about 0.04 per unit of volatility. If you would invest 10.00 in PACIFIC ONLINE on November 7, 2024 and sell it today you would earn a total of 5.00 from holding PACIFIC ONLINE or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. PACIFIC ONLINE
Performance |
| Timeline |
| NAKED WINES PLC |
| PACIFIC ONLINE |
NAKED WINES and PACIFIC ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and PACIFIC ONLINE
The main advantage of trading using opposite NAKED WINES and PACIFIC ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, PACIFIC ONLINE 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 PACIFIC ONLINE will offset losses from the drop in PACIFIC ONLINE's long position.| NAKED WINES vs. Take Two Interactive Software | NAKED WINES vs. DXC Technology Co | NAKED WINES vs. East Africa Metals | NAKED WINES vs. SIERRA METALS |
| PACIFIC ONLINE vs. Cal Maine Foods | PACIFIC ONLINE vs. FARM 51 GROUP | PACIFIC ONLINE vs. ALEFARM BREWING DK 05 | PACIFIC ONLINE vs. AUST AGRICULTURAL |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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