Correlation Between NAKED WINES and Fuji Media
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Fuji Media 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 Fuji Media 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 Fuji Media Holdings, you can compare the effects of market volatilities on NAKED WINES and Fuji Media 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 Fuji Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Fuji Media.
Diversification Opportunities for NAKED WINES and Fuji Media
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAKED and Fuji is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings 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 Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of NAKED WINES i.e., NAKED WINES and Fuji Media go up and down completely randomly.
Pair Corralation between NAKED WINES and Fuji Media
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Fuji Media. In addition to that, NAKED WINES is 1.08 times more volatile than Fuji Media Holdings. It trades about -0.08 of its total potential returns per unit of risk. Fuji Media Holdings is currently generating about 0.19 per unit of volatility. If you would invest 1,030 in Fuji Media Holdings on October 29, 2024 and sell it today you would earn a total of 130.00 from holding Fuji Media Holdings or generate 12.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NAKED WINES PLC vs. Fuji Media Holdings
Performance |
Timeline |
NAKED WINES PLC |
Fuji Media Holdings |
NAKED WINES and Fuji Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NAKED WINES and Fuji Media
The main advantage of trading using opposite NAKED WINES and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Fuji Media 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 Fuji Media will offset losses from the drop in Fuji Media's long position.NAKED WINES vs. Cal Maine Foods | NAKED WINES vs. Axfood AB | NAKED WINES vs. Align Technology | NAKED WINES vs. Lery Seafood Group |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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