Correlation Between NAKED WINES and Performance Food
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Performance Food 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 Performance Food 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 Performance Food Group, you can compare the effects of market volatilities on NAKED WINES and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Performance Food.
Diversification Opportunities for NAKED WINES and Performance Food
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between NAKED and Performance is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of NAKED WINES i.e., NAKED WINES and Performance Food go up and down completely randomly.
Pair Corralation between NAKED WINES and Performance Food
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Performance Food. In addition to that, NAKED WINES is 1.78 times more volatile than Performance Food Group. It trades about -0.15 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.33 per unit of volatility. If you would invest 7,400 in Performance Food Group on September 3, 2024 and sell it today you would earn a total of 850.00 from holding Performance Food Group or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Performance Food Group
Performance |
| Timeline |
| NAKED WINES PLC |
| Performance Food |
NAKED WINES and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Performance Food
The main advantage of trading using opposite NAKED WINES and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food'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 |
| Performance Food vs. China BlueChemical | Performance Food vs. AIR PRODCHEMICALS | Performance Food vs. Siamgas And Petrochemicals | Performance Food vs. Sanyo Chemical Industries |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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