Correlation Between NAKED WINES and X FAB
Can any of the company-specific risk be diversified away by investing in both NAKED WINES and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on NAKED WINES and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and X FAB.
Diversification Opportunities for NAKED WINES and X FAB
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAKED and XFB is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of NAKED WINES i.e., NAKED WINES and X FAB go up and down completely randomly.
Pair Corralation between NAKED WINES and X FAB
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the X FAB. In addition to that, NAKED WINES is 1.57 times more volatile than X FAB Silicon Foundries. It trades about -0.08 of its total potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.01 per unit of volatility. If you would invest 498.00 in X FAB Silicon Foundries on October 29, 2024 and sell it today you would earn a total of 0.00 from holding X FAB Silicon Foundries or generate 0.0% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| NAKED WINES PLC |
| X FAB Silicon |
NAKED WINES and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and X FAB
The main advantage of trading using opposite NAKED WINES and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB'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 |
| X FAB vs. Reinsurance Group of | X FAB vs. GURU ORGANIC ENERGY | X FAB vs. PATTIES FOODS | X FAB vs. Cal Maine Foods |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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