Correlation Between ITALIAN WINE and Packagingof America

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

Diversification Opportunities for ITALIAN WINE and Packagingof America

-0.03

Correlation Coefficient

ITALIAN WINE  Packagingof America

Good diversification

The 3 months correlation between ITALIAN and Packagingof is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packagingof America 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 Packagingof America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packagingof America has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and Packagingof America go up and down completely randomly.

Pair Corralation between ITALIAN WINE and Packagingof America

Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Packagingof America. In addition to that, ITALIAN WINE is 2.77 times more volatile than Packaging of. It trades about -0.04 of its total potential returns per unit of risk. Packaging of is currently generating about 0.01 per unit of volatility. If you would invest  22,938  in Packaging of on October 21, 2024 and sell it today you would earn a total of  72.00  from holding Packaging of or generate 0.31% return on investment over 90 days.

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

ITALIAN WINE BRANDS  vs.  Packaging of

ITALIAN WINE BRANDS

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, ITALIAN WINE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Packagingof America

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Packaging of are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Packagingof America reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ITALIAN WINE and Packagingof America

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

The idea behind ITALIAN WINE BRANDS and Packaging of 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.