Correlation Between CONSTELLATION and Getty Images

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

By analyzing existing cross correlation between CONSTELLATION BRANDS INC and Getty Images Holdings, you can compare the effects of market volatilities on CONSTELLATION and Getty Images 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 CONSTELLATION with a short position of Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSTELLATION and Getty Images.

Diversification Opportunities for CONSTELLATION and Getty Images

0.29

Correlation Coefficient

CONSTELLATION  Getty Images

Modest diversification

The 3 months correlation between CONSTELLATION and Getty is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CONSTELLATION BRANDS INC and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings and CONSTELLATION 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 CONSTELLATION BRANDS INC are associated (or correlated) with Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of CONSTELLATION i.e., CONSTELLATION and Getty Images go up and down completely randomly.

Pair Corralation between CONSTELLATION and Getty Images

Assuming the 90 days trading horizon CONSTELLATION BRANDS INC is expected to generate 0.11 times more return on investment than Getty Images. However, CONSTELLATION BRANDS INC is 9.32 times less risky than Getty Images. It trades about 0.01 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.01 per unit of risk. If you would invest  9,902  in CONSTELLATION BRANDS INC on October 21, 2024 and sell it today you would earn a total of  68.00  from holding CONSTELLATION BRANDS INC or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.38%
Values	Daily Returns

CONSTELLATION BRANDS INC  vs.  Getty Images Holdings

CONSTELLATION BRANDS INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CONSTELLATION and Getty Images

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

The idea behind CONSTELLATION BRANDS INC and Getty Images Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.