Correlation Between Splash Beverage and Iconic Brands
Can any of the company-specific risk be diversified away by investing in both Splash Beverage and Iconic Brands 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 Splash Beverage and Iconic Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Splash Beverage Group and Iconic Brands, you can compare the effects of market volatilities on Splash Beverage and Iconic Brands 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 Splash Beverage with a short position of Iconic Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Splash Beverage and Iconic Brands.
Diversification Opportunities for Splash Beverage and Iconic Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Splash and Iconic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Splash Beverage Group and Iconic Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iconic Brands and Splash Beverage 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 Splash Beverage Group are associated (or correlated) with Iconic Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iconic Brands has no effect on the direction of Splash Beverage i.e., Splash Beverage and Iconic Brands go up and down completely randomly.
Pair Corralation between Splash Beverage and Iconic Brands
Given the investment horizon of 90 days Splash Beverage Group is expected to generate 0.28 times more return on investment than Iconic Brands. However, Splash Beverage Group is 3.57 times less risky than Iconic Brands. It trades about -0.07 of its potential returns per unit of risk. Iconic Brands is currently generating about -0.21 per unit of risk. If you would invest 24.00 in Splash Beverage Group on August 24, 2024 and sell it today you would lose (3.00) from holding Splash Beverage Group or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Splash Beverage Group vs. Iconic Brands
Performance |
| Timeline |
| Splash Beverage Group |
| Iconic Brands |
Splash Beverage and Iconic Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Splash Beverage and Iconic Brands
The main advantage of trading using opposite Splash Beverage and Iconic Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Splash Beverage position performs unexpectedly, Iconic Brands 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 Iconic Brands will offset losses from the drop in Iconic Brands' long position.| Splash Beverage vs. Iconic Brands | Splash Beverage vs. Eastside Distilling | Splash Beverage vs. Andrew Peller Limited | Splash Beverage vs. Duckhorn Portfolio |
| Iconic Brands vs. Diageo PLC ADR | Iconic Brands vs. Constellation Brands Class | Iconic Brands vs. Thai Beverage PCL | Iconic Brands vs. Morningstar Unconstrained Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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