Correlation Between NAKED WINES and Lenovo Group
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Lenovo Group 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 Lenovo Group 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 Lenovo Group Limited, you can compare the effects of market volatilities on NAKED WINES and Lenovo Group 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 Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Lenovo Group.
Diversification Opportunities for NAKED WINES and Lenovo Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NAKED and Lenovo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited 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 Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of NAKED WINES i.e., NAKED WINES and Lenovo Group go up and down completely randomly.
Pair Corralation between NAKED WINES and Lenovo Group
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Lenovo Group. In addition to that, NAKED WINES is 1.4 times more volatile than Lenovo Group Limited. It trades about -0.01 of its total potential returns per unit of risk. Lenovo Group Limited is currently generating about 0.05 per unit of volatility. If you would invest 1,373 in Lenovo Group Limited on September 3, 2024 and sell it today you would earn a total of 787.00 from holding Lenovo Group Limited or generate 57.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Lenovo Group Limited
Performance |
| Timeline |
| NAKED WINES PLC |
| Lenovo Group Limited |
NAKED WINES and Lenovo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Lenovo Group
The main advantage of trading using opposite NAKED WINES and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Lenovo Group 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 Lenovo Group will offset losses from the drop in Lenovo Group'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 |
| Lenovo Group vs. Arista Networks | Lenovo Group vs. Lenovo Group Limited | Lenovo Group vs. Seiko Epson | Lenovo Group vs. Legend Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |