Correlation Between VIVA WINE and Platinum Investment

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

By analyzing existing cross correlation between VIVA WINE GROUP and Platinum Investment Management, you can compare the effects of market volatilities on VIVA WINE and Platinum Investment 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 VIVA WINE with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Platinum Investment.

Diversification Opportunities for VIVA WINE and Platinum Investment

0.19

Correlation Coefficient

VIVA WINE  Platinum Investment

Average diversification

The 3 months correlation between VIVA and Platinum is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and VIVA 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 VIVA WINE GROUP are associated (or correlated) with Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of VIVA WINE i.e., VIVA WINE and Platinum Investment go up and down completely randomly.

Pair Corralation between VIVA WINE and Platinum Investment

Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 0.53 times more return on investment than Platinum Investment. However, VIVA WINE GROUP is 1.9 times less risky than Platinum Investment. It trades about 0.05 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.02 per unit of risk. If you would invest  237.00  in VIVA WINE GROUP on April 24, 2025 and sell it today you would earn a total of  116.00  from holding VIVA WINE GROUP or generate 48.95% return on investment over 90 days.

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

VIVA WINE GROUP  vs.  Platinum Investment Management

VIVA WINE GROUP

Risk-Adjusted Performance

Very Weak

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

Platinum Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Investment Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Platinum Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIVA WINE and Platinum Investment

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

The idea behind VIVA WINE GROUP and Platinum Investment Management 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.