Correlation Between NAKED WINES and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and Vishay Intertechnology 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 Vishay Intertechnology 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 Vishay Intertechnology, you can compare the effects of market volatilities on NAKED WINES and Vishay Intertechnology 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 Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Vishay Intertechnology.
Diversification Opportunities for NAKED WINES and Vishay Intertechnology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NAKED and Vishay is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of NAKED WINES i.e., NAKED WINES and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between NAKED WINES and Vishay Intertechnology
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Vishay Intertechnology. In addition to that, NAKED WINES is 1.75 times more volatile than Vishay Intertechnology. It trades about -0.03 of its total potential returns per unit of risk. Vishay Intertechnology is currently generating about -0.04 per unit of volatility. If you would invest 1,612 in Vishay Intertechnology on November 1, 2024 and sell it today you would lose (39.00) from holding Vishay Intertechnology or give up 2.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Vishay Intertechnology
Performance |
| Timeline |
| NAKED WINES PLC |
| Vishay Intertechnology |
NAKED WINES and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Vishay Intertechnology
The main advantage of trading using opposite NAKED WINES and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.| NAKED WINES vs. CHRYSALIS INVESTMENTS LTD | NAKED WINES vs. FIRST SAVINGS FINL | NAKED WINES vs. CITY OFFICE REIT | NAKED WINES vs. CENTURIA OFFICE REIT |
| Vishay Intertechnology vs. NAKED WINES PLC | Vishay Intertechnology vs. American Eagle Outfitters | Vishay Intertechnology vs. VIVA WINE GROUP | Vishay Intertechnology vs. Marie Brizard Wine |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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