Correlation Between Naked Wines and Cboe UK
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By analyzing existing cross correlation between Naked Wines plc and Cboe UK Consumer, you can compare the effects of market volatilities on Naked Wines and Cboe UK 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 Cboe UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Cboe UK.
Diversification Opportunities for Naked Wines and Cboe UK
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Cboe is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Cboe UK Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cboe UK Consumer 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 Cboe UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cboe UK Consumer has no effect on the direction of Naked Wines i.e., Naked Wines and Cboe UK go up and down completely randomly.
Pair Corralation between Naked Wines and Cboe UK
Assuming the 90 days trading horizon Naked Wines plc is expected to under-perform the Cboe UK. In addition to that, Naked Wines is 2.95 times more volatile than Cboe UK Consumer. It trades about -0.1 of its total potential returns per unit of risk. Cboe UK Consumer is currently generating about 0.29 per unit of volatility. If you would invest 3,136,105 in Cboe UK Consumer on September 14, 2024 and sell it today you would earn a total of 165,273 from holding Cboe UK Consumer or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naked Wines plc vs. Cboe UK Consumer
Performance |
| Timeline |
Naked Wines and Cboe UK Volatility Contrast
Predicted Return Density |
| Returns |
Naked Wines plc
Pair trading matchups for Naked Wines
Cboe UK Consumer
Pair trading matchups for Cboe UK
Pair Trading with Naked Wines and Cboe UK
The main advantage of trading using opposite Naked Wines and Cboe UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Cboe UK 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 Cboe UK will offset losses from the drop in Cboe UK's long position.| Naked Wines vs. Ondine Biomedical | Naked Wines vs. Europa Metals | Naked Wines vs. Revolution Beauty Group | Naked Wines vs. Moonpig Group PLC |
| Cboe UK vs. Fidelity National Information | Cboe UK vs. Naked Wines plc | Cboe UK vs. Alliance Data Systems | Cboe UK vs. Abingdon Health 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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