Correlation Between Viva Wine and Sileon AB
Can any of the company-specific risk be diversified away by investing in both Viva Wine and Sileon AB 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 Sileon AB 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 Sileon AB, you can compare the effects of market volatilities on Viva Wine and Sileon AB 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Wine and Sileon AB.
Diversification Opportunities for Viva Wine and Sileon AB
Very poor diversification
The 3 months correlation between Viva and Sileon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Viva Wine Group and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of Viva Wine i.e., Viva Wine and Sileon AB go up and down completely randomly.
Pair Corralation between Viva Wine and Sileon AB
Assuming the 90 days trading horizon Viva Wine Group is expected to generate 0.19 times more return on investment than Sileon AB. However, Viva Wine Group is 5.37 times less risky than Sileon AB. It trades about 0.1 of its potential returns per unit of risk. Sileon AB is currently generating about -0.07 per unit of risk. If you would invest 3,780 in Viva Wine Group on October 27, 2024 and sell it today you would earn a total of 100.00 from holding Viva Wine Group or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viva Wine Group vs. Sileon AB
Performance |
| Timeline |
| Viva Wine Group |
| Sileon AB |
Viva Wine and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viva Wine and Sileon AB
The main advantage of trading using opposite Viva Wine and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viva Wine position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB'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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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