Correlation Between EAST Old and Naked Wines
Can any of the company-specific risk be diversified away by investing in both EAST Old and Naked Wines 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 EAST Old and Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAST Old and Naked Wines plc, you can compare the effects of market volatilities on EAST Old and Naked Wines 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 EAST Old with a short position of Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAST Old and Naked Wines.
Diversification Opportunities for EAST Old and Naked Wines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EAST and Naked is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EAST Old and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc and EAST Old 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 EAST Old are associated (or correlated) with Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of EAST Old i.e., EAST Old and Naked Wines go up and down completely randomly.
Pair Corralation between EAST Old and Naked Wines
If you would invest 60.00 in Naked Wines plc on December 3, 2024 and sell it today you would earn a total of 25.00 from holding Naked Wines plc or generate 41.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
EAST Old vs. Naked Wines plc
Performance |
Timeline |
EAST Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Naked Wines plc |
EAST Old and Naked Wines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EAST Old and Naked Wines
The main advantage of trading using opposite EAST Old and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAST Old position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' long position.EAST Old vs. Iconic Brands | EAST Old vs. Andrew Peller Limited | EAST Old vs. Splash Beverage Group | EAST Old vs. Fresh Grapes LLC |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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