Correlation Between NAKED WINES and Pure Storage
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Pure Storage 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 Pure Storage 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 Pure Storage, you can compare the effects of market volatilities on NAKED WINES and Pure Storage 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 Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Pure Storage.
Diversification Opportunities for NAKED WINES and Pure Storage
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NAKED and Pure is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage 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 Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of NAKED WINES i.e., NAKED WINES and Pure Storage go up and down completely randomly.
Pair Corralation between NAKED WINES and Pure Storage
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Pure Storage. But the stock apears to be less risky and, when comparing its historical volatility, NAKED WINES PLC is 1.05 times less risky than Pure Storage. The stock trades about -0.15 of its potential returns per unit of risk. The Pure Storage is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,586 in Pure Storage on September 3, 2024 and sell it today you would earn a total of 458.00 from holding Pure Storage or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Pure Storage
Performance |
| Timeline |
| NAKED WINES PLC |
| Pure Storage |
NAKED WINES and Pure Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Pure Storage
The main advantage of trading using opposite NAKED WINES and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage's long position.| NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech |
| Pure Storage vs. Teradata Corp | Pure Storage vs. Superior Plus Corp | Pure Storage vs. NMI Holdings | Pure Storage 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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