Correlation Between VIRGIN WINES and FANDIFI TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both VIRGIN WINES and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on VIRGIN WINES and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and FANDIFI TECHNOLOGY.

Diversification Opportunities for VIRGIN WINES and FANDIFI TECHNOLOGY

-1.0

Correlation Coefficient

VIRGIN WINES  FANDIFI TECHNOLOGY

Pay attention - limited upside

The 3 months correlation between VIRGIN and FANDIFI is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding VIRGIN WINES UK and FANDIFI TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANDIFI TECHNOLOGY has no effect on the direction of VIRGIN WINES i.e., VIRGIN WINES and FANDIFI TECHNOLOGY go up and down completely randomly.

Pair Corralation between VIRGIN WINES and FANDIFI TECHNOLOGY

If you would invest  0.05  in FANDIFI TECHNOLOGY P on September 2, 2024 and sell it today you would earn a total of  0.00  from holding FANDIFI TECHNOLOGY P or generate 0.0% return on investment over 90 days.

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

VIRGIN WINES UK  vs.  FANDIFI TECHNOLOGY P

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. Despite nearly stable basic indicators, VIRGIN WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VIRGIN WINES and FANDIFI TECHNOLOGY

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

The idea behind VIRGIN WINES UK and FANDIFI TECHNOLOGY P 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.