Correlation Between NAKED WINES and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Penta Ocean 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 Penta Ocean 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 Penta Ocean Construction Co, you can compare the effects of market volatilities on NAKED WINES and Penta Ocean 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 Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Penta Ocean.
Diversification Opportunities for NAKED WINES and Penta Ocean
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NAKED and Penta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc 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 Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of NAKED WINES i.e., NAKED WINES and Penta Ocean go up and down completely randomly.
Pair Corralation between NAKED WINES and Penta Ocean
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Penta Ocean. In addition to that, NAKED WINES is 3.88 times more volatile than Penta Ocean Construction Co. It trades about -0.08 of its total potential returns per unit of risk. Penta Ocean Construction Co is currently generating about -0.02 per unit of volatility. If you would invest 392.00 in Penta Ocean Construction Co on October 29, 2024 and sell it today you would lose (2.00) from holding Penta Ocean Construction Co or give up 0.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NAKED WINES PLC vs. Penta Ocean Construction Co
Performance |
Timeline |
NAKED WINES PLC |
Penta Ocean Construc |
NAKED WINES and Penta Ocean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NAKED WINES and Penta Ocean
The main advantage of trading using opposite NAKED WINES and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Penta Ocean 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 Penta Ocean will offset losses from the drop in Penta Ocean'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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