Correlation Between Nitro Games and Viva Wine

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

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

Diversification Opportunities for Nitro Games and Viva Wine

-0.74

Correlation Coefficient

Nitro Games  Viva Wine

Pay attention - limited upside

The 3 months correlation between Nitro and Viva is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nitro Games Oyj 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 Nitro Games 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 Nitro Games Oyj 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 Nitro Games i.e., Nitro Games and Viva Wine go up and down completely randomly.

Pair Corralation between Nitro Games and Viva Wine

Assuming the 90 days trading horizon Nitro Games Oyj is expected to generate 2.18 times more return on investment than Viva Wine. However, Nitro Games is 2.18 times more volatile than Viva Wine Group. It trades about 0.08 of its potential returns per unit of risk. Viva Wine Group is currently generating about -0.18 per unit of risk. If you would invest  228.00  in Nitro Games Oyj on September 19, 2024 and sell it today you would earn a total of  10.00  from holding Nitro Games Oyj or generate 4.39% return on investment over 90 days.

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

Nitro Games Oyj  vs.  Viva Wine Group

Nitro Games Oyj

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nitro Games Oyj are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nitro Games unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 weak 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 Nitro Games and Viva Wine

The main advantage of trading using opposite Nitro Games and Viva Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nitro Games 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 Nitro Games Oyj 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.