Correlation Between Virgin Wines and Chrysalis Investments
Can any of the company-specific risk be diversified away by investing in both Virgin Wines and Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments, you can compare the effects of market volatilities on Virgin Wines and Chrysalis Investments 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 Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Wines and Chrysalis Investments.
Diversification Opportunities for Virgin Wines and Chrysalis Investments
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Virgin and Chrysalis is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments 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 Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Virgin Wines i.e., Virgin Wines and Chrysalis Investments go up and down completely randomly.
Pair Corralation between Virgin Wines and Chrysalis Investments
Assuming the 90 days trading horizon Virgin Wines UK is expected to generate 1.13 times more return on investment than Chrysalis Investments. However, Virgin Wines is 1.13 times more volatile than Chrysalis Investments. It trades about 0.01 of its potential returns per unit of risk. Chrysalis Investments is currently generating about -0.33 per unit of risk. If you would invest 3,300 in Virgin Wines UK on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Virgin Wines UK or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Virgin Wines UK vs. Chrysalis Investments
Performance |
| Timeline |
| Virgin Wines UK |
| Chrysalis Investments |
Virgin Wines and Chrysalis Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Wines and Chrysalis Investments
The main advantage of trading using opposite Virgin Wines and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.| Virgin Wines vs. Ecclesiastical Insurance Office | Virgin Wines vs. Baker Steel Resources | Virgin Wines vs. Symphony Environmental Technologies | Virgin Wines vs. Cairn Homes PLC |
| Chrysalis Investments vs. Virgin Wines UK | Chrysalis Investments vs. Zegona Communications Plc | Chrysalis Investments vs. Ion Beam Applications | Chrysalis Investments vs. Geely Automobile Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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