Correlation Between Virgin Wines and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both Virgin Wines and CAP LEASE 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 CAP LEASE 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 CAP LEASE AVIATION, you can compare the effects of market volatilities on Virgin Wines and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Wines and CAP LEASE.
Diversification Opportunities for Virgin Wines and CAP LEASE
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virgin and CAP is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Virgin Wines i.e., Virgin Wines and CAP LEASE go up and down completely randomly.
Pair Corralation between Virgin Wines and CAP LEASE
If you would invest 50.00 in CAP LEASE AVIATION on October 30, 2024 and sell it today you would earn a total of 0.00 from holding CAP LEASE AVIATION or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Wines UK vs. CAP LEASE AVIATION
Performance |
| Timeline |
| Virgin Wines UK |
| CAP LEASE AVIATION |
Virgin Wines and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Wines and CAP LEASE
The main advantage of trading using opposite Virgin Wines and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.| Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Toyota Motor Corp | Virgin Wines vs. MOL Hungarian Oil |
| CAP LEASE vs. Associated British Foods | CAP LEASE vs. Bankers Investment Trust | CAP LEASE vs. Commerzbank AG | CAP LEASE vs. Verizon Communications |
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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