Correlation Between ITALIAN WINE and MAGNUM MINING

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

Diversification Opportunities for ITALIAN WINE and MAGNUM MINING

0.4

Correlation Coefficient

ITALIAN WINE  MAGNUM MINING

Very weak diversification

The 3 months correlation between ITALIAN and MAGNUM is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and MAGNUM MINING EXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM MINING EXP 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 MAGNUM MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM MINING EXP has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and MAGNUM MINING go up and down completely randomly.

Pair Corralation between ITALIAN WINE and MAGNUM MINING

If you would invest  4.45  in MAGNUM MINING EXP on December 29, 2024 and sell it today you would earn a total of  0.00  from holding MAGNUM MINING EXP or generate 0.0% return on investment over 90 days.

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

ITALIAN WINE BRANDS  vs.  MAGNUM MINING EXP

ITALIAN WINE BRANDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ITALIAN WINE BRANDS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MAGNUM MINING EXP

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAGNUM MINING EXP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ITALIAN WINE and MAGNUM MINING

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

The idea behind ITALIAN WINE BRANDS and MAGNUM MINING EXP 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.