Correlation Between NAKED WINES and Pentair Plc
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Pentair Plc 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 Pentair Plc 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 Pentair plc, you can compare the effects of market volatilities on NAKED WINES and Pentair Plc 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 Pentair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Pentair Plc.
Diversification Opportunities for NAKED WINES and Pentair Plc
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAKED and Pentair is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Pentair plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair plc 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 Pentair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair plc has no effect on the direction of NAKED WINES i.e., NAKED WINES and Pentair Plc go up and down completely randomly.
Pair Corralation between NAKED WINES and Pentair Plc
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 2.73 times more return on investment than Pentair Plc. However, NAKED WINES is 2.73 times more volatile than Pentair plc. It trades about 0.31 of its potential returns per unit of risk. Pentair plc is currently generating about -0.4 per unit of risk. If you would invest 61.00 in NAKED WINES PLC on December 5, 2024 and sell it today you would earn a total of 15.00 from holding NAKED WINES PLC or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Pentair plc
Performance |
| Timeline |
| NAKED WINES PLC |
| Pentair plc |
NAKED WINES and Pentair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Pentair Plc
The main advantage of trading using opposite NAKED WINES and Pentair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Pentair Plc 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 Pentair Plc will offset losses from the drop in Pentair Plc's long position.| NAKED WINES vs. Aristocrat Leisure Limited | NAKED WINES vs. SIEM OFFSHORE NEW | NAKED WINES vs. InPlay Oil Corp | NAKED WINES vs. COMMERCIAL VEHICLE |
| Pentair Plc vs. SHELF DRILLING LTD | Pentair Plc vs. TRADELINK ELECTRON | Pentair Plc vs. Yuexiu Transport Infrastructure | Pentair Plc vs. Mitsui Chemicals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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