Correlation Between Naked Wines and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Grieg Seafood 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 Naked Wines and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Grieg Seafood, you can compare the effects of market volatilities on Naked Wines and Grieg Seafood 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 Naked Wines with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Grieg Seafood.
Diversification Opportunities for Naked Wines and Grieg Seafood
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Naked and Grieg is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Naked Wines 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 Naked Wines plc are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of Naked Wines i.e., Naked Wines and Grieg Seafood go up and down completely randomly.
Pair Corralation between Naked Wines and Grieg Seafood
Assuming the 90 days trading horizon Naked Wines plc is expected to under-perform the Grieg Seafood. In addition to that, Naked Wines is 1.58 times more volatile than Grieg Seafood. It trades about -0.02 of its total potential returns per unit of risk. Grieg Seafood is currently generating about 0.0 per unit of volatility. If you would invest 6,742 in Grieg Seafood on September 2, 2024 and sell it today you would lose (662.00) from holding Grieg Seafood or give up 9.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naked Wines plc vs. Grieg Seafood
Performance |
| Timeline |
| Naked Wines plc |
| Grieg Seafood |
Naked Wines and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Grieg Seafood
The main advantage of trading using opposite Naked Wines and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Naked Wines vs. Microchip Technology | Naked Wines vs. Sabien Technology Group | Naked Wines vs. Auction Technology Group | Naked Wines vs. Sabre Insurance Group |
| Grieg Seafood vs. Uniper SE | Grieg Seafood vs. Mulberry Group PLC | Grieg Seafood vs. London Security Plc | Grieg Seafood vs. Triad Group PLC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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