Correlation Between ITALIAN WINE and PT Global

Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and PT Global 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 ITALIAN WINE and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ITALIAN WINE BRANDS and PT Global Mediacom, you can compare the effects of market volatilities on ITALIAN WINE and PT Global 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 ITALIAN WINE with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and PT Global.

Diversification Opportunities for ITALIAN WINE and PT Global

-0.41

Correlation Coefficient

ITALIAN WINE  PT Global

Very good diversification

The 3 months correlation between ITALIAN and 06L is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and ITALIAN 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 ITALIAN WINE BRANDS are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and PT Global go up and down completely randomly.

Pair Corralation between ITALIAN WINE and PT Global

Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to generate 0.35 times more return on investment than PT Global. However, ITALIAN WINE BRANDS is 2.84 times less risky than PT Global. It trades about 0.23 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.2 per unit of risk. If you would invest  2,230  in ITALIAN WINE BRANDS on October 4, 2024 and sell it today you would earn a total of  170.00  from holding ITALIAN WINE BRANDS or generate 7.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

ITALIAN WINE BRANDS  vs.  PT Global Mediacom

ITALIAN WINE BRANDS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ITALIAN WINE BRANDS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ITALIAN WINE reported solid returns over the last few months and may actually be approaching a breakup point.

PT Global Mediacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ITALIAN WINE and PT Global

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

The idea behind ITALIAN WINE BRANDS and PT Global Mediacom 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.