Correlation Between NEW MILLENNIUM and VIRGIN WINES
Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM and VIRGIN WINES 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 NEW MILLENNIUM and VIRGIN WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW MILLENNIUM IRON and VIRGIN WINES UK, you can compare the effects of market volatilities on NEW MILLENNIUM and VIRGIN WINES 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 NEW MILLENNIUM with a short position of VIRGIN WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and VIRGIN WINES.
Diversification Opportunities for NEW MILLENNIUM and VIRGIN WINES
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEW and VIRGIN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and VIRGIN WINES UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRGIN WINES UK and NEW MILLENNIUM 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 NEW MILLENNIUM IRON are associated (or correlated) with VIRGIN WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRGIN WINES UK has no effect on the direction of NEW MILLENNIUM i.e., NEW MILLENNIUM and VIRGIN WINES go up and down completely randomly.
Pair Corralation between NEW MILLENNIUM and VIRGIN WINES
Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to generate 0.98 times more return on investment than VIRGIN WINES. However, NEW MILLENNIUM IRON is 1.02 times less risky than VIRGIN WINES. It trades about 0.2 of its potential returns per unit of risk. VIRGIN WINES UK is currently generating about 0.1 per unit of risk. If you would invest 1,650 in NEW MILLENNIUM IRON on September 10, 2025 and sell it today you would earn a total of 1,110 from holding NEW MILLENNIUM IRON or generate 67.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW MILLENNIUM IRON vs. VIRGIN WINES UK
Performance |
| Timeline |
| NEW MILLENNIUM IRON |
| VIRGIN WINES UK |
NEW MILLENNIUM and VIRGIN WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW MILLENNIUM and VIRGIN WINES
The main advantage of trading using opposite NEW MILLENNIUM and VIRGIN WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM position performs unexpectedly, VIRGIN WINES 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 VIRGIN WINES will offset losses from the drop in VIRGIN WINES's long position.| NEW MILLENNIUM vs. Apple Inc | NEW MILLENNIUM vs. Apple Inc | NEW MILLENNIUM vs. Apple Inc | NEW MILLENNIUM vs. Apple Inc |
| VIRGIN WINES vs. Davide Campari Milano | VIRGIN WINES vs. Altia Oyj | VIRGIN WINES vs. LANSON BCC INH EO | VIRGIN WINES vs. MASI AGRICOLA SPA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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