Correlation Between Naked Wines and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Naked Wines and Centaur Media 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 Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on Naked Wines and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Centaur Media.
Diversification Opportunities for Naked Wines and Centaur Media
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Naked and Centaur is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Naked Wines i.e., Naked Wines and Centaur Media go up and down completely randomly.
Pair Corralation between Naked Wines and Centaur Media
Assuming the 90 days trading horizon Naked Wines plc is expected to under-perform the Centaur Media. In addition to that, Naked Wines is 1.53 times more volatile than Centaur Media. It trades about -0.04 of its total potential returns per unit of risk. Centaur Media is currently generating about -0.03 per unit of volatility. If you would invest 4,542 in Centaur Media on October 16, 2024 and sell it today you would lose (1,842) from holding Centaur Media or give up 40.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naked Wines plc vs. Centaur Media
Performance |
| Timeline |
| Naked Wines plc |
| Centaur Media |
Naked Wines and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Centaur Media
The main advantage of trading using opposite Naked Wines and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Naked Wines vs. Aptitude Software Group | Naked Wines vs. Austevoll Seafood ASA | Naked Wines vs. Gaztransport et Technigaz | Naked Wines vs. Trainline Plc |
| Centaur Media vs. JD Sports Fashion | Centaur Media vs. Naked Wines plc | Centaur Media vs. Virgin Wines UK | Centaur Media vs. CAP LEASE AVIATION |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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