Correlation Between Naked Wines and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Molson Coors 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 Molson Coors 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 Molson Coors Beverage, you can compare the effects of market volatilities on Naked Wines and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Molson Coors.
Diversification Opportunities for Naked Wines and Molson Coors
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Naked and Molson is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of Naked Wines i.e., Naked Wines and Molson Coors go up and down completely randomly.
Pair Corralation between Naked Wines and Molson Coors
Assuming the 90 days trading horizon Naked Wines plc is expected to generate 1.93 times more return on investment than Molson Coors. However, Naked Wines is 1.93 times more volatile than Molson Coors Beverage. It trades about -0.05 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.17 per unit of risk. If you would invest 4,833 in Naked Wines plc on October 20, 2024 and sell it today you would lose (233.00) from holding Naked Wines plc or give up 4.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Naked Wines plc vs. Molson Coors Beverage
Performance |
| Timeline |
| Naked Wines plc |
| Molson Coors Beverage |
Naked Wines and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Molson Coors
The main advantage of trading using opposite Naked Wines and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Naked Wines vs. Samsung Electronics Co | Naked Wines vs. Samsung Electronics Co | Naked Wines vs. Toyota Motor Corp | Naked Wines vs. Reliance Industries Ltd |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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