Correlation Between Marie Brizard and Volkswagen

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

By analyzing existing cross correlation between Marie Brizard Wine and Volkswagen AG, you can compare the effects of market volatilities on Marie Brizard and Volkswagen 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 Marie Brizard with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marie Brizard and Volkswagen.

Diversification Opportunities for Marie Brizard and Volkswagen

-0.28

Correlation Coefficient

Marie Brizard  Volkswagen

Very good diversification

The 3 months correlation between Marie and Volkswagen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and Marie Brizard 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 Marie Brizard Wine are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Marie Brizard i.e., Marie Brizard and Volkswagen go up and down completely randomly.

Pair Corralation between Marie Brizard and Volkswagen

Assuming the 90 days trading horizon Marie Brizard Wine is expected to under-perform the Volkswagen. But the stock apears to be less risky and, when comparing its historical volatility, Marie Brizard Wine is 1.18 times less risky than Volkswagen. The stock trades about -0.06 of its potential returns per unit of risk. The Volkswagen AG is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  8,240  in Volkswagen AG on September 25, 2024 and sell it today you would earn a total of  464.00  from holding Volkswagen AG or generate 5.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Marie Brizard Wine  vs.  Volkswagen AG

Marie Brizard Wine

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marie Brizard Wine are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Marie Brizard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Volkswagen AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Volkswagen AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Marie Brizard and Volkswagen

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

The idea behind Marie Brizard Wine and Volkswagen AG 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.