Correlation Between Viva Wine and Profoto Holding
Can any of the company-specific risk be diversified away by investing in both Viva Wine and Profoto Holding 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 Profoto Holding 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 Profoto Holding AB, you can compare the effects of market volatilities on Viva Wine and Profoto Holding 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 Profoto Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Wine and Profoto Holding.
Diversification Opportunities for Viva Wine and Profoto Holding
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Viva and Profoto is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Viva Wine Group and Profoto Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profoto Holding AB 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 Profoto Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profoto Holding AB has no effect on the direction of Viva Wine i.e., Viva Wine and Profoto Holding go up and down completely randomly.
Pair Corralation between Viva Wine and Profoto Holding
Assuming the 90 days trading horizon Viva Wine Group is expected to generate 0.66 times more return on investment than Profoto Holding. However, Viva Wine Group is 1.52 times less risky than Profoto Holding. It trades about -0.19 of its potential returns per unit of risk. Profoto Holding AB is currently generating about -0.44 per unit of risk. If you would invest 4,180 in Viva Wine Group on September 12, 2024 and sell it today you would lose (250.00) from holding Viva Wine Group or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Viva Wine Group vs. Profoto Holding AB
Performance |
| Timeline |
| Viva Wine Group |
| Profoto Holding AB |
Viva Wine and Profoto Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viva Wine and Profoto Holding
The main advantage of trading using opposite Viva Wine and Profoto Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viva Wine position performs unexpectedly, Profoto Holding 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 Profoto Holding will offset losses from the drop in Profoto Holding's long position.| Viva Wine vs. Cint Group AB | Viva Wine vs. Nordic Waterproofing Holding | Viva Wine vs. RVRC Holding AB | Viva Wine vs. Synsam AB |
| Profoto Holding vs. SolTech Energy Sweden | Profoto Holding vs. 24SevenOffice Scandinavia AB | Profoto Holding vs. Investment AB Oresund | Profoto Holding vs. Vitec Software Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Correlations Find global opportunities by holding instruments from different markets |