Correlation Between Duckhorn Portfolio and Naked Wines

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

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

Diversification Opportunities for Duckhorn Portfolio and Naked Wines

0.0

Correlation Coefficient

Duckhorn Portfolio  Naked Wines

Pay attention - limited upside

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

Pair Corralation between Duckhorn Portfolio and Naked Wines

If you would invest  271.00  in Naked Wines plc on December 2, 2024 and sell it today you would earn a total of  6.00  from holding Naked Wines plc or generate 2.21% return on investment over 90 days.

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

Duckhorn Portfolio  vs.  Naked Wines plc

Duckhorn Portfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duckhorn Portfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Duckhorn Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Naked Wines plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Naked Wines plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Naked Wines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Duckhorn Portfolio and Naked Wines

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

The idea behind Duckhorn Portfolio and Naked Wines plc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.