Correlation Between Oakley Capital and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Oakley Capital and Virgin Wines 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 Oakley Capital and Virgin Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Virgin Wines UK, you can compare the effects of market volatilities on Oakley Capital and Virgin Wines 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 Oakley Capital with a short position of Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Virgin Wines.
Diversification Opportunities for Oakley Capital and Virgin Wines
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oakley and Virgin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Virgin Wines UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Wines UK and Oakley Capital 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 Oakley Capital Investments are associated (or correlated) with Virgin Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Wines UK has no effect on the direction of Oakley Capital i.e., Oakley Capital and Virgin Wines go up and down completely randomly.
Pair Corralation between Oakley Capital and Virgin Wines
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.47 times more return on investment than Virgin Wines. However, Oakley Capital Investments is 2.14 times less risky than Virgin Wines. It trades about 0.03 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.04 per unit of risk. If you would invest 41,626 in Oakley Capital Investments on August 24, 2024 and sell it today you would earn a total of 6,974 from holding Oakley Capital Investments or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oakley Capital Investments vs. Virgin Wines UK
Performance |
| Timeline |
| Oakley Capital Inves |
| Virgin Wines UK |
Oakley Capital and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Virgin Wines
The main advantage of trading using opposite Oakley Capital and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital position performs unexpectedly, Virgin Wines 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 Virgin Wines will offset losses from the drop in Virgin Wines' long position.| Oakley Capital vs. Beowulf Mining | Oakley Capital vs. Caledonia Mining | Oakley Capital vs. Eastinco Mining Exploration | Oakley Capital vs. Bloomsbury Publishing Plc |
| Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Hyundai Motor | Virgin Wines vs. Toyota Motor Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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