Correlation Between Vintage Wine and Naked Wines
Can any of the company-specific risk be diversified away by investing in both Vintage Wine and Naked Wines 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 Naked Wines 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 Naked Wines plc, you can compare the effects of market volatilities on Vintage Wine and Naked Wines 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 Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vintage Wine and Naked Wines.
Diversification Opportunities for Vintage Wine and Naked Wines
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vintage and Naked is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vintage Wine Estates and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc 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 Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of Vintage Wine i.e., Vintage Wine and Naked Wines go up and down completely randomly.
Pair Corralation between Vintage Wine and Naked Wines
Considering the 90-day investment horizon Vintage Wine Estates is expected to under-perform the Naked Wines. In addition to that, Vintage Wine is 1.85 times more volatile than Naked Wines plc. It trades about -0.08 of its total potential returns per unit of risk. Naked Wines plc is currently generating about 0.06 per unit of volatility. If you would invest 145.00 in Naked Wines plc on August 24, 2024 and sell it today you would earn a total of 126.00 from holding Naked Wines plc or generate 86.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.35% |
| Values | Daily Returns |
Vintage Wine Estates vs. Naked Wines plc
Performance |
| Timeline |
| Vintage Wine Estates |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Naked Wines plc |
Vintage Wine and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vintage Wine and Naked Wines
The main advantage of trading using opposite Vintage Wine and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vintage Wine position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' long position.| Vintage Wine vs. MGP Ingredients | Vintage Wine vs. Brown Forman | Vintage Wine vs. Diageo PLC ADR | Vintage Wine vs. Brown Forman |
| Naked Wines vs. Diageo PLC ADR | Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Pernod Ricard SA | Naked Wines 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |