Correlation Between NAKED WINES and Jumbo SA
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Jumbo SA 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 Jumbo SA 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 Jumbo SA, you can compare the effects of market volatilities on NAKED WINES and Jumbo SA 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 Jumbo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Jumbo SA.
Diversification Opportunities for NAKED WINES and Jumbo SA
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NAKED and Jumbo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Jumbo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumbo SA 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 Jumbo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumbo SA has no effect on the direction of NAKED WINES i.e., NAKED WINES and Jumbo SA go up and down completely randomly.
Pair Corralation between NAKED WINES and Jumbo SA
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 1.9 times more return on investment than Jumbo SA. However, NAKED WINES is 1.9 times more volatile than Jumbo SA. It trades about 0.01 of its potential returns per unit of risk. Jumbo SA is currently generating about 0.02 per unit of risk. If you would invest 79.00 in NAKED WINES PLC on September 12, 2024 and sell it today you would lose (13.00) from holding NAKED WINES PLC or give up 16.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Jumbo SA
Performance |
| Timeline |
| NAKED WINES PLC |
| Jumbo SA |
NAKED WINES and Jumbo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Jumbo SA
The main advantage of trading using opposite NAKED WINES and Jumbo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Jumbo SA 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 Jumbo SA will offset losses from the drop in Jumbo SA'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 |
| Jumbo SA vs. ePlay Digital | Jumbo SA vs. NAKED WINES PLC | Jumbo SA vs. THAI BEVERAGE | Jumbo SA vs. United Natural Foods |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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