Correlation Between ITALIAN WINE and CARTIER SILVER

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

By analyzing existing cross correlation between ITALIAN WINE BRANDS and CARTIER SILVER P, you can compare the effects of market volatilities on ITALIAN WINE and CARTIER SILVER 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 ITALIAN WINE with a short position of CARTIER SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and CARTIER SILVER.

Diversification Opportunities for ITALIAN WINE and CARTIER SILVER

0.19

Correlation Coefficient

ITALIAN WINE  CARTIER SILVER

Average diversification

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

Pair Corralation between ITALIAN WINE and CARTIER SILVER

Assuming the 90 days horizon ITALIAN WINE is expected to generate 21.07 times less return on investment than CARTIER SILVER. But when comparing it to its historical volatility, ITALIAN WINE BRANDS is 8.66 times less risky than CARTIER SILVER. It trades about 0.02 of its potential returns per unit of risk. CARTIER SILVER P is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  7.40  in CARTIER SILVER P on April 24, 2025 and sell it today you would earn a total of  0.65  from holding CARTIER SILVER P or generate 8.78% return on investment over 90 days.

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

ITALIAN WINE BRANDS  vs.  CARTIER SILVER P

ITALIAN WINE BRANDS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ITALIAN WINE BRANDS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ITALIAN WINE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CARTIER SILVER P

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CARTIER SILVER P are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, CARTIER SILVER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ITALIAN WINE and CARTIER SILVER

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

The idea behind ITALIAN WINE BRANDS and CARTIER SILVER 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.