Correlation Between Synsam AB and Viva Wine

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

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

Diversification Opportunities for Synsam AB and Viva Wine

0.58

Correlation Coefficient

Synsam AB  Viva Wine

Very weak diversification

The 3 months correlation between Synsam and Viva is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Synsam 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 Synsam AB 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 Synsam 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 Synsam AB i.e., Synsam AB and Viva Wine go up and down completely randomly.

Pair Corralation between Synsam AB and Viva Wine

Assuming the 90 days trading horizon Synsam AB is expected to generate 1.37 times more return on investment than Viva Wine. However, Synsam AB is 1.37 times more volatile than Viva Wine Group. It trades about 0.01 of its potential returns per unit of risk. Viva Wine Group is currently generating about 0.01 per unit of risk. If you would invest  4,380  in Synsam AB on October 2, 2024 and sell it today you would earn a total of  75.00  from holding Synsam AB or generate 1.71% return on investment over 90 days.

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

Synsam AB  vs.  Viva Wine Group

Synsam AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synsam AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 Synsam AB and Viva Wine

The main advantage of trading using opposite Synsam AB and Viva Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synsam AB 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 Synsam 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.