Correlation Between Virgin Wines and Hargreaves Services
Can any of the company-specific risk be diversified away by investing in both Virgin Wines and Hargreaves Services 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 Hargreaves Services 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 Hargreaves Services Plc, you can compare the effects of market volatilities on Virgin Wines and Hargreaves Services 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 Hargreaves Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Wines and Hargreaves Services.
Diversification Opportunities for Virgin Wines and Hargreaves Services
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Virgin and Hargreaves is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and Hargreaves Services Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hargreaves Services 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 Hargreaves Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hargreaves Services Plc has no effect on the direction of Virgin Wines i.e., Virgin Wines and Hargreaves Services go up and down completely randomly.
Pair Corralation between Virgin Wines and Hargreaves Services
Assuming the 90 days trading horizon Virgin Wines UK is expected to generate 0.22 times more return on investment than Hargreaves Services. However, Virgin Wines UK is 4.46 times less risky than Hargreaves Services. It trades about -0.12 of its potential returns per unit of risk. Hargreaves Services Plc is currently generating about -0.08 per unit of risk. If you would invest 3,600 in Virgin Wines UK on September 2, 2024 and sell it today you would lose (50.00) from holding Virgin Wines UK or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Wines UK vs. Hargreaves Services Plc
Performance |
| Timeline |
| Virgin Wines UK |
| Hargreaves Services Plc |
Virgin Wines and Hargreaves Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Wines and Hargreaves Services
The main advantage of trading using opposite Virgin Wines and Hargreaves Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines position performs unexpectedly, Hargreaves Services 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 Hargreaves Services will offset losses from the drop in Hargreaves Services' long position.| Virgin Wines vs. Coor Service Management | Virgin Wines vs. British American Tobacco | Virgin Wines vs. Liontrust Asset Management | Virgin Wines vs. Atalaya Mining |
| Hargreaves Services vs. Hansa Investment | Hargreaves Services vs. Cizzle Biotechnology Holdings | Hargreaves Services vs. Diversified Energy | Hargreaves Services vs. Smithson Investment Trust |
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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