Correlation Between Vintage Wine and Pernod Ricard

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

By analyzing existing cross correlation between Vintage Wine Estates and Pernod Ricard SA, you can compare the effects of market volatilities on Vintage Wine and Pernod Ricard 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 Vintage Wine with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vintage Wine and Pernod Ricard.

Diversification Opportunities for Vintage Wine and Pernod Ricard

0.0

Correlation Coefficient

Vintage Wine  Pernod Ricard

Pay attention - limited upside

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

Pair Corralation between Vintage Wine and Pernod Ricard

If you would invest (100.00) in Vintage Wine Estates on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Vintage Wine Estates or generate -100.0% return on investment over 90 days.

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

Vintage Wine Estates  vs.  Pernod Ricard SA

Vintage Wine Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vintage Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vintage Wine is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pernod Ricard SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pernod Ricard SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Vintage Wine and Pernod Ricard

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

The idea behind Vintage Wine Estates and Pernod Ricard SA 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.