Correlation Between Vintage Wine and MGP Ingredients
Can any of the company-specific risk be diversified away by investing in both Vintage Wine and MGP Ingredients 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 Vintage Wine and MGP Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vintage Wine Estates and MGP Ingredients, you can compare the effects of market volatilities on Vintage Wine and MGP Ingredients 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 Vintage Wine with a short position of MGP Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vintage Wine and MGP Ingredients.
Diversification Opportunities for Vintage Wine and MGP Ingredients
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vintage and MGP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vintage Wine Estates and MGP Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGP Ingredients and Vintage 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 Vintage Wine Estates are associated (or correlated) with MGP Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGP Ingredients has no effect on the direction of Vintage Wine i.e., Vintage Wine and MGP Ingredients go up and down completely randomly.
Pair Corralation between Vintage Wine and MGP Ingredients
If you would invest (100.00) in Vintage Wine Estates on November 9, 2024 and sell it today you would earn a total of 100.00 from holding Vintage Wine Estates or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Vintage Wine Estates vs. MGP Ingredients
Performance |
| Timeline |
| Vintage Wine Estates |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| MGP Ingredients |
Vintage Wine and MGP Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vintage Wine and MGP Ingredients
The main advantage of trading using opposite Vintage Wine and MGP Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vintage Wine position performs unexpectedly, MGP Ingredients 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 MGP Ingredients will offset losses from the drop in MGP Ingredients' long position.| Vintage Wine vs. MGP Ingredients | Vintage Wine vs. Brown Forman | Vintage Wine vs. Diageo PLC ADR | Vintage Wine vs. Brown Forman |
| MGP Ingredients vs. Brown Forman | MGP Ingredients vs. Diageo PLC ADR | MGP Ingredients vs. Brown Forman | MGP Ingredients vs. Constellation Brands Class |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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