Correlation Between VIRGIN WINES and VIVA WINE

Can any of the company-specific risk be diversified away by investing in both VIRGIN WINES and VIVA WINE 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 VIRGIN WINES and VIVA WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIRGIN WINES UK and VIVA WINE GROUP, you can compare the effects of market volatilities on VIRGIN WINES and VIVA WINE 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 VIRGIN WINES with a short position of VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and VIVA WINE.

Diversification Opportunities for VIRGIN WINES and VIVA WINE

0.0

Correlation Coefficient

VIRGIN WINES  VIVA WINE

Pay attention - limited upside

The 3 months correlation between VIRGIN and VIVA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIRGIN WINES UK and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP and VIRGIN 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 VIRGIN WINES UK are associated (or correlated) with VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of VIRGIN WINES i.e., VIRGIN WINES and VIVA WINE go up and down completely randomly.

Pair Corralation between VIRGIN WINES and VIVA WINE

If you would invest  80.00  in VIRGIN WINES UK on September 5, 2024 and sell it today you would earn a total of  0.00  from holding VIRGIN WINES UK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

VIRGIN WINES UK  vs.  VIVA WINE GROUP

VIRGIN WINES UK

Risk-Adjusted Performance

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Very Weak

Over the last 90 days VIRGIN WINES UK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VIRGIN WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VIVA WINE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIVA WINE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with VIRGIN WINES and VIVA WINE

The main advantage of trading using opposite VIRGIN WINES and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRGIN WINES position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.

The idea behind VIRGIN WINES UK and VIVA WINE GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.