Correlation Between Virgin Wines and Ondine Biomedical

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

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

Diversification Opportunities for Virgin Wines and Ondine Biomedical

-0.83

Correlation Coefficient

Virgin Wines  Ondine Biomedical

Pay attention - limited upside

The 3 months correlation between Virgin and Ondine is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical and Virgin Wines 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 Virgin Wines UK are associated (or correlated) with Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of Virgin Wines i.e., Virgin Wines and Ondine Biomedical go up and down completely randomly.

Pair Corralation between Virgin Wines and Ondine Biomedical

Assuming the 90 days trading horizon Virgin Wines UK is expected to under-perform the Ondine Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, Virgin Wines UK is 5.35 times less risky than Ondine Biomedical. The stock trades about -0.28 of its potential returns per unit of risk. The Ondine Biomedical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  588.00  in Ondine Biomedical on September 15, 2024 and sell it today you would earn a total of  172.00  from holding Ondine Biomedical or generate 29.25% return on investment over 90 days.

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

Virgin Wines UK  vs.  Ondine Biomedical

Virgin Wines UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virgin Wines UK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Ondine Biomedical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ondine Biomedical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ondine Biomedical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virgin Wines and Ondine Biomedical

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

The idea behind Virgin Wines UK and Ondine Biomedical 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.