Correlation Between NYSE Composite and Vintage Wine
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Vintage Wine 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 NYSE Composite and Vintage Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Vintage Wine Estates, you can compare the effects of market volatilities on NYSE Composite and Vintage Wine 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 NYSE Composite with a short position of Vintage Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Vintage Wine.
Diversification Opportunities for NYSE Composite and Vintage Wine
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Vintage is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Vintage Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vintage Wine Estates and NYSE Composite 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 NYSE Composite are associated (or correlated) with Vintage Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vintage Wine Estates has no effect on the direction of NYSE Composite i.e., NYSE Composite and Vintage Wine go up and down completely randomly.
Pair Corralation between NYSE Composite and Vintage Wine
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.06 times more return on investment than Vintage Wine. However, NYSE Composite is 15.4 times less risky than Vintage Wine. It trades about 0.07 of its potential returns per unit of risk. Vintage Wine Estates is currently generating about -0.08 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 449,351 from holding NYSE Composite or generate 29.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.94% |
| Values | Daily Returns |
NYSE Composite vs. Vintage Wine Estates
Performance |
| Timeline |
NYSE Composite and Vintage Wine Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Vintage Wine Estates
Pair trading matchups for Vintage Wine
Pair Trading with NYSE Composite and Vintage Wine
The main advantage of trading using opposite NYSE Composite and Vintage Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Vintage Wine 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 Vintage Wine will offset losses from the drop in Vintage Wine's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Vintage Wine vs. MGP Ingredients | Vintage Wine vs. Brown Forman | Vintage Wine vs. Diageo PLC ADR | Vintage Wine vs. Brown Forman |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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