Correlation Between VIVA WINE and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and ALEFARM BREWING 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 VIVA WINE and ALEFARM BREWING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and ALEFARM BREWING DK 05, you can compare the effects of market volatilities on VIVA WINE and ALEFARM BREWING 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 VIVA WINE with a short position of ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and ALEFARM BREWING.
Diversification Opportunities for VIVA WINE and ALEFARM BREWING
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIVA and ALEFARM is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of VIVA WINE i.e., VIVA WINE and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between VIVA WINE and ALEFARM BREWING
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 0.34 times more return on investment than ALEFARM BREWING. However, VIVA WINE GROUP is 2.91 times less risky than ALEFARM BREWING. It trades about -0.09 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about -0.11 per unit of risk. If you would invest 356.00 in VIVA WINE GROUP on October 7, 2024 and sell it today you would lose (21.00) from holding VIVA WINE GROUP or give up 5.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
VIVA WINE GROUP vs. ALEFARM BREWING DK 05
Performance |
Timeline |
VIVA WINE GROUP |
ALEFARM BREWING DK |
VIVA WINE and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VIVA WINE and ALEFARM BREWING
The main advantage of trading using opposite VIVA WINE and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.VIVA WINE vs. MARKET VECTR RETAIL | VIVA WINE vs. Western Copper and | VIVA WINE vs. JIAHUA STORES | VIVA WINE vs. Zijin Mining Group |
ALEFARM BREWING vs. CHINA TONTINE WINES | ALEFARM BREWING vs. Playa Hotels Resorts | ALEFARM BREWING vs. Axway Software SA | ALEFARM BREWING vs. Guidewire Software |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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