Correlation Between VIVA WINE and State Street

Can any of the company-specific risk be diversified away by investing in both VIVA WINE and State Street 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 State Street 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 State Street, you can compare the effects of market volatilities on VIVA WINE and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and State Street.

Diversification Opportunities for VIVA WINE and State Street

-0.91

Correlation Coefficient

VIVA WINE  State Street

Pay attention - limited upside

The 3 months correlation between VIVA and State is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of VIVA WINE i.e., VIVA WINE and State Street go up and down completely randomly.

Pair Corralation between VIVA WINE and State Street

Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 3.19 times more return on investment than State Street. However, VIVA WINE is 3.19 times more volatile than State Street. It trades about 0.06 of its potential returns per unit of risk. State Street is currently generating about 0.04 per unit of risk. If you would invest  121.00  in VIVA WINE GROUP on October 4, 2024 and sell it today you would earn a total of  201.00  from holding VIVA WINE GROUP or generate 166.12% return on investment over 90 days.

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

VIVA WINE GROUP  vs.  State Street

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

State Street

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in State Street are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, State Street reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIVA WINE and State Street

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

The idea behind VIVA WINE GROUP and State Street 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.