Correlation Between Virgin Wines and Phoenix Group
Can any of the company-specific risk be diversified away by investing in both Virgin Wines and Phoenix Group 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 Phoenix Group 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 Phoenix Group Holdings, you can compare the effects of market volatilities on Virgin Wines and Phoenix Group 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 Phoenix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Wines and Phoenix Group.
Diversification Opportunities for Virgin Wines and Phoenix Group
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virgin and Phoenix is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and Phoenix Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Group Holdings 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 Phoenix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Group Holdings has no effect on the direction of Virgin Wines i.e., Virgin Wines and Phoenix Group go up and down completely randomly.
Pair Corralation between Virgin Wines and Phoenix Group
Assuming the 90 days trading horizon Virgin Wines UK is expected to under-perform the Phoenix Group. But the stock apears to be less risky and, when comparing its historical volatility, Virgin Wines UK is 1.03 times less risky than Phoenix Group. The stock trades about -0.19 of its potential returns per unit of risk. The Phoenix Group Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 47,430 in Phoenix Group Holdings on August 31, 2024 and sell it today you would earn a total of 3,970 from holding Phoenix Group Holdings or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
Virgin Wines UK vs. Phoenix Group Holdings
Performance |
| Timeline |
| Virgin Wines UK |
| Phoenix Group Holdings |
Virgin Wines and Phoenix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Wines and Phoenix Group
The main advantage of trading using opposite Virgin Wines and Phoenix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines position performs unexpectedly, Phoenix Group 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 Phoenix Group will offset losses from the drop in Phoenix Group's long position.| Virgin Wines vs. Quadrise Plc | Virgin Wines vs. ImmuPharma PLC | Virgin Wines vs. Intuitive Investments Group | Virgin Wines vs. European Metals Holdings |
| Phoenix Group vs. Aberdeen Diversified Income | Phoenix Group vs. Herald Investment Trust | Phoenix Group vs. Mindflair Plc | Phoenix Group vs. Fair Oaks Income |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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