Correlation Between Constellation Brands and Twitter
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and Twitter 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 Constellation Brands and Twitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Twitter, you can compare the effects of market volatilities on Constellation Brands and Twitter 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 Constellation Brands with a short position of Twitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Twitter.
Diversification Opportunities for Constellation Brands and Twitter
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Constellation and Twitter is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of Constellation Brands i.e., Constellation Brands and Twitter go up and down completely randomly.
Pair Corralation between Constellation Brands and Twitter
If you would invest 5,370 in Twitter on February 2, 2024 and sell it today you would earn a total of 0.00 from holding Twitter or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.35% |
Values | Daily Returns |
Constellation Brands Class vs. Twitter
Performance |
Timeline |
Constellation Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Constellation Brands and Twitter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Constellation Brands and Twitter
The main advantage of trading using opposite Constellation Brands and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.Constellation Brands vs. Andrew Peller Limited | Constellation Brands vs. Naked Wines plc | Constellation Brands vs. Willamette Valley Vineyards | Constellation Brands vs. The Tinley Beverage |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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