Correlation Between RVRC Holding and Viva Wine

Can any of the company-specific risk be diversified away by investing in both RVRC Holding and Viva Wine 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 RVRC Holding and Viva Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RVRC Holding AB and Viva Wine Group, you can compare the effects of market volatilities on RVRC Holding and Viva Wine 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 RVRC Holding with a short position of Viva Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of RVRC Holding and Viva Wine.

Diversification Opportunities for RVRC Holding and Viva Wine

0.34

Correlation Coefficient

RVRC Holding  Viva Wine

Weak diversification

The 3 months correlation between RVRC and Viva is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding RVRC Holding AB and Viva Wine Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Wine Group and RVRC Holding 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 RVRC Holding AB are associated (or correlated) with Viva Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Wine Group has no effect on the direction of RVRC Holding i.e., RVRC Holding and Viva Wine go up and down completely randomly.

Pair Corralation between RVRC Holding and Viva Wine

Assuming the 90 days trading horizon RVRC Holding AB is expected to under-perform the Viva Wine. In addition to that, RVRC Holding is 1.55 times more volatile than Viva Wine Group. It trades about -0.04 of its total potential returns per unit of risk. Viva Wine Group is currently generating about 0.01 per unit of volatility. If you would invest  3,803  in Viva Wine Group on October 2, 2024 and sell it today you would lose (3.00) from holding Viva Wine Group or give up 0.08% of portfolio value over 90 days.

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

RVRC Holding AB  vs.  Viva Wine Group

RVRC Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RVRC Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Viva Wine Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viva Wine Group 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with RVRC Holding and Viva Wine

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

The idea behind RVRC Holding AB and Viva Wine Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.