Correlation Between Virgin Wines and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Virgin Wines and Ecclesiastical Insurance 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Virgin Wines and Ecclesiastical Insurance 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 Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Wines and Ecclesiastical Insurance.
Diversification Opportunities for Virgin Wines and Ecclesiastical Insurance
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virgin and Ecclesiastical is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance 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 Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Virgin Wines i.e., Virgin Wines and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Virgin Wines and Ecclesiastical Insurance
Assuming the 90 days trading horizon Virgin Wines UK is expected to generate 1.93 times more return on investment than Ecclesiastical Insurance. However, Virgin Wines is 1.93 times more volatile than Ecclesiastical Insurance Office. It trades about 0.36 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.07 per unit of risk. If you would invest 3,050 in Virgin Wines UK on November 28, 2024 and sell it today you would earn a total of 650.00 from holding Virgin Wines UK or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Wines UK vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Virgin Wines UK |
| Ecclesiastical Insurance |
Virgin Wines and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Wines and Ecclesiastical Insurance
The main advantage of trading using opposite Virgin Wines and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Samsung Electronics Co | Virgin Wines vs. Toyota Motor Corp |
| Ecclesiastical Insurance vs. Supermarket Income REIT | Ecclesiastical Insurance vs. Everyman Media Group | Ecclesiastical Insurance vs. LBG Media PLC | Ecclesiastical Insurance vs. Ubisoft Entertainment |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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