Correlation Between Virgin Wines and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Virgin Wines and Antofagasta PLC 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 Virgin Wines and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Wines UK and Antofagasta PLC, you can compare the effects of market volatilities on Virgin Wines and Antofagasta PLC 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 Virgin Wines with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Wines and Antofagasta PLC.
Diversification Opportunities for Virgin Wines and Antofagasta PLC
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virgin and Antofagasta is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and Virgin 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 Virgin Wines UK are associated (or correlated) with Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Virgin Wines i.e., Virgin Wines and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Virgin Wines and Antofagasta PLC
Assuming the 90 days trading horizon Virgin Wines UK is expected to under-perform the Antofagasta PLC. In addition to that, Virgin Wines is 1.22 times more volatile than Antofagasta PLC. It trades about -0.05 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about 0.01 per unit of volatility. If you would invest 156,132 in Antofagasta PLC on September 23, 2024 and sell it today you would earn a total of 5,218 from holding Antofagasta PLC or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Wines UK vs. Antofagasta PLC
Performance |
| Timeline |
| Virgin Wines UK |
| Antofagasta PLC |
Virgin Wines and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Wines and Antofagasta PLC
The main advantage of trading using opposite Virgin Wines and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Virgin Wines vs. Compagnie Plastic Omnium | Virgin Wines vs. Eco Animal Health | Virgin Wines vs. PureTech Health plc | Virgin Wines vs. Martin Marietta Materials |
| Antofagasta PLC vs. Virgin Wines UK | Antofagasta PLC vs. DFS Furniture PLC | Antofagasta PLC vs. Universal Display Corp | Antofagasta PLC vs. Home Depot |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |