Correlation Between PGE and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both PGE and NAKED 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 PGE and NAKED WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGE Corporation and NAKED WINES PLC, you can compare the effects of market volatilities on PGE and NAKED 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 PGE with a short position of NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGE and NAKED WINES.
Diversification Opportunities for PGE and NAKED WINES
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PGE and NAKED is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PGE Corp. and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC and PGE 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 PGE Corporation are associated (or correlated) with NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of PGE i.e., PGE and NAKED WINES go up and down completely randomly.
Pair Corralation between PGE and NAKED WINES
Assuming the 90 days horizon PGE Corporation is expected to under-perform the NAKED WINES. But the stock apears to be less risky and, when comparing its historical volatility, PGE Corporation is 2.21 times less risky than NAKED WINES. The stock trades about -0.25 of its potential returns per unit of risk. The NAKED WINES PLC is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 62.00 in NAKED WINES PLC on September 15, 2024 and sell it today you would lose (5.00) from holding NAKED WINES PLC or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGE Corp. vs. NAKED WINES PLC
Performance |
| Timeline |
| PGE Corporation |
| NAKED WINES PLC |
PGE and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGE and NAKED WINES
The main advantage of trading using opposite PGE and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGE position performs unexpectedly, NAKED 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 NAKED WINES will offset losses from the drop in NAKED WINES's long position.| PGE vs. NAKED WINES PLC | PGE vs. G III Apparel Group | PGE vs. SBI Insurance Group | PGE vs. INSURANCE AUST GRP |
| NAKED WINES vs. KAUFMAN ET BROAD | NAKED WINES vs. Gold Road Resources | NAKED WINES vs. Chiba Bank | NAKED WINES vs. OAKTRSPECLENDNEW |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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