Correlation Between NAKED WINES and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on NAKED WINES and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and DALATA HOTEL.
Diversification Opportunities for NAKED WINES and DALATA HOTEL
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NAKED and DALATA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of NAKED WINES i.e., NAKED WINES and DALATA HOTEL go up and down completely randomly.
Pair Corralation between NAKED WINES and DALATA HOTEL
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 2.03 times more return on investment than DALATA HOTEL. However, NAKED WINES is 2.03 times more volatile than DALATA HOTEL. It trades about 0.14 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.08 per unit of risk. If you would invest 56.00 in NAKED WINES PLC on November 7, 2024 and sell it today you would earn a total of 7.00 from holding NAKED WINES PLC or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. DALATA HOTEL
Performance |
| Timeline |
| NAKED WINES PLC |
| DALATA HOTEL |
NAKED WINES and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and DALATA HOTEL
The main advantage of trading using opposite NAKED WINES and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL'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 |
| DALATA HOTEL vs. Harmony Gold Mining | DALATA HOTEL vs. De Grey Mining | DALATA HOTEL vs. THAI BEVERAGE | DALATA HOTEL vs. MAG SILVER |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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