Correlation Between MGP Ingredients and Vintage Wine

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

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

Diversification Opportunities for MGP Ingredients and Vintage Wine

0.0

Correlation Coefficient

MGP Ingredients  Vintage Wine

Pay attention - limited upside

The 3 months correlation between MGP and Vintage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MGP Ingredients and Vintage Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vintage Wine Estates and MGP Ingredients 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 MGP Ingredients are associated (or correlated) with Vintage Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vintage Wine Estates has no effect on the direction of MGP Ingredients i.e., MGP Ingredients and Vintage Wine go up and down completely randomly.

Pair Corralation between MGP Ingredients and Vintage Wine

If you would invest (100.00) in Vintage Wine Estates on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Vintage Wine Estates or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MGP Ingredients  vs.  Vintage Wine Estates

MGP Ingredients

Risk-Adjusted Performance

Very Weak

Over the last 90 days MGP Ingredients has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Vintage Wine Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vintage Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vintage Wine is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MGP Ingredients and Vintage Wine

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

The idea behind MGP Ingredients and Vintage Wine Estates 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.