Correlation Between Fevertree Drinks and Intuitive Investments

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

By analyzing existing cross correlation between Fevertree Drinks Plc and Intuitive Investments Group, you can compare the effects of market volatilities on Fevertree Drinks and Intuitive Investments 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 Fevertree Drinks with a short position of Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Intuitive Investments.

Diversification Opportunities for Fevertree Drinks and Intuitive Investments

-0.08

Correlation Coefficient

Fevertree Drinks  Intuitive Investments

Good diversification

The 3 months correlation between Fevertree and Intuitive is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments and Fevertree Drinks 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 Fevertree Drinks Plc are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Fevertree Drinks i.e., Fevertree Drinks and Intuitive Investments go up and down completely randomly.

Pair Corralation between Fevertree Drinks and Intuitive Investments

Assuming the 90 days trading horizon Fevertree Drinks Plc is expected to generate 1.28 times more return on investment than Intuitive Investments. However, Fevertree Drinks is 1.28 times more volatile than Intuitive Investments Group. It trades about -0.01 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.02 per unit of risk. If you would invest  71,000  in Fevertree Drinks Plc on December 2, 2024 and sell it today you would lose (3,850) from holding Fevertree Drinks Plc or give up 5.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fevertree Drinks Plc  vs.  Intuitive Investments Group

Fevertree Drinks Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fevertree Drinks Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fevertree Drinks is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Intuitive Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fevertree Drinks and Intuitive Investments

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

The idea behind Fevertree Drinks Plc and Intuitive Investments 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 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.