Correlation Between NAKED WINES and NEL ASA
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and NEL ASA 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 NEL ASA 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 NEL ASA ADR30, you can compare the effects of market volatilities on NAKED WINES and NEL ASA 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 NEL ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and NEL ASA.
Diversification Opportunities for NAKED WINES and NEL ASA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAKED and NEL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and NEL ASA ADR30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEL ASA ADR30 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 NEL ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEL ASA ADR30 has no effect on the direction of NAKED WINES i.e., NAKED WINES and NEL ASA go up and down completely randomly.
Pair Corralation between NAKED WINES and NEL ASA
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 0.33 times more return on investment than NEL ASA. However, NAKED WINES PLC is 3.04 times less risky than NEL ASA. It trades about -0.09 of its potential returns per unit of risk. NEL ASA ADR30 is currently generating about -0.18 per unit of risk. If you would invest 67.00 in NAKED WINES PLC on August 28, 2024 and sell it today you would lose (4.00) from holding NAKED WINES PLC or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NAKED WINES PLC vs. NEL ASA ADR30
Performance |
| Timeline |
| NAKED WINES PLC |
| NEL ASA ADR30 |
NAKED WINES and NEL ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and NEL ASA
The main advantage of trading using opposite NAKED WINES and NEL ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, NEL ASA 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 NEL ASA will offset losses from the drop in NEL ASA's long position.| NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech | NAKED WINES vs. SIVERS SEMICONDUCTORS AB |
| NEL ASA vs. Superior Plus Corp | NEL ASA vs. NMI Holdings | NEL ASA vs. Origin Agritech | NEL ASA vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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