Correlation Between Viva Wine and Nanoform Finland
Can any of the company-specific risk be diversified away by investing in both Viva Wine and Nanoform Finland 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 Viva Wine and Nanoform Finland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viva Wine Group and Nanoform Finland Plc, you can compare the effects of market volatilities on Viva Wine and Nanoform Finland 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 Viva Wine with a short position of Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Wine and Nanoform Finland.
Diversification Opportunities for Viva Wine and Nanoform Finland
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viva and Nanoform is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Viva Wine Group and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland Plc and Viva Wine 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 Viva Wine Group are associated (or correlated) with Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of Viva Wine i.e., Viva Wine and Nanoform Finland go up and down completely randomly.
Pair Corralation between Viva Wine and Nanoform Finland
Assuming the 90 days trading horizon Viva Wine Group is expected to generate 0.45 times more return on investment than Nanoform Finland. However, Viva Wine Group is 2.21 times less risky than Nanoform Finland. It trades about 0.0 of its potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.03 per unit of risk. If you would invest 4,259 in Viva Wine Group on September 13, 2024 and sell it today you would lose (279.00) from holding Viva Wine Group or give up 6.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viva Wine Group vs. Nanoform Finland Plc
Performance |
| Timeline |
| Viva Wine Group |
| Nanoform Finland Plc |
Viva Wine and Nanoform Finland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viva Wine and Nanoform Finland
The main advantage of trading using opposite Viva Wine and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viva Wine position performs unexpectedly, Nanoform Finland 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 Nanoform Finland will offset losses from the drop in Nanoform Finland's long position.| Viva Wine vs. High Coast Distillery | Viva Wine vs. Arctic Blue Beverages | Viva Wine vs. KABE Group AB | Viva Wine vs. IAR Systems Group |
| Nanoform Finland vs. Bavarian Nordic | Nanoform Finland vs. BioPorto | Nanoform Finland vs. Zaptec AS | Nanoform Finland vs. cBrain AS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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