Correlation Between NAKED WINES and Shutterstock
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Shutterstock 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 Shutterstock 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 Shutterstock, you can compare the effects of market volatilities on NAKED WINES and Shutterstock 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 Shutterstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Shutterstock.
Diversification Opportunities for NAKED WINES and Shutterstock
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between NAKED and Shutterstock is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Shutterstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shutterstock 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 Shutterstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shutterstock has no effect on the direction of NAKED WINES i.e., NAKED WINES and Shutterstock go up and down completely randomly.
Pair Corralation between NAKED WINES and Shutterstock
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 0.51 times more return on investment than Shutterstock. However, NAKED WINES PLC is 1.96 times less risky than Shutterstock. It trades about 0.14 of its potential returns per unit of risk. Shutterstock is currently generating about 0.03 per unit of risk. If you would invest 53.00 in NAKED WINES PLC on November 3, 2024 and sell it today you would earn a total of 7.00 from holding NAKED WINES PLC or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NAKED WINES PLC vs. Shutterstock
Performance |
| Timeline |
| NAKED WINES PLC |
| Shutterstock |
NAKED WINES and Shutterstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Shutterstock
The main advantage of trading using opposite NAKED WINES and Shutterstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Shutterstock 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 Shutterstock will offset losses from the drop in Shutterstock's long position.| NAKED WINES vs. MGP Ingredients | NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. Origin Agritech |
| Shutterstock vs. Thai Beverage Public | Shutterstock vs. PREMIER FOODS | Shutterstock vs. Kingdee International Software | Shutterstock vs. AECOM TECHNOLOGY |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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