Correlation Between Naked Wines and Amer Sports,

Can any of the company-specific risk be diversified away by investing in both Naked Wines and Amer Sports, 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 Naked Wines and Amer Sports, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Naked Wines plc and Amer Sports,, you can compare the effects of market volatilities on Naked Wines and Amer Sports, 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 Naked Wines with a short position of Amer Sports,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Amer Sports,.

Diversification Opportunities for Naked Wines and Amer Sports,

0.19

Correlation Coefficient

Naked Wines  Amer Sports,

Average diversification

The 3 months correlation between Naked and Amer is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, and Naked Wines 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 Naked Wines plc are associated (or correlated) with Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Naked Wines i.e., Naked Wines and Amer Sports, go up and down completely randomly.

Pair Corralation between Naked Wines and Amer Sports,

Assuming the 90 days horizon Naked Wines is expected to generate 2.13 times less return on investment than Amer Sports,. In addition to that, Naked Wines is 2.51 times more volatile than Amer Sports,. It trades about 0.02 of its total potential returns per unit of risk. Amer Sports, is currently generating about 0.12 per unit of volatility. If you would invest  1,340  in Amer Sports, on October 5, 2024 and sell it today you would earn a total of  1,609  from holding Amer Sports, or generate 120.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	74.92%
Values	Daily Returns

Naked Wines plc  vs.  Amer Sports,

Naked Wines plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Naked Wines plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Naked Wines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amer Sports,

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Naked Wines and Amer Sports,

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

The idea behind Naked Wines plc and Amer Sports, 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.