Correlation Between CSW Industrials, and Naked Wines

Can any of the company-specific risk be diversified away by investing in both CSW Industrials, and Naked 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 CSW Industrials, and Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSW Industrials, and Naked Wines plc, you can compare the effects of market volatilities on CSW Industrials, and Naked 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 CSW Industrials, with a short position of Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSW Industrials, and Naked Wines.

Diversification Opportunities for CSW Industrials, and Naked Wines

0.23

Correlation Coefficient

CSW Industrials,  Naked Wines

Modest diversification

The 3 months correlation between CSW and Naked is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials, and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc and CSW Industrials, 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 CSW Industrials, are associated (or correlated) with Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of CSW Industrials, i.e., CSW Industrials, and Naked Wines go up and down completely randomly.

Pair Corralation between CSW Industrials, and Naked Wines

Considering the 90-day investment horizon CSW Industrials, is expected to under-perform the Naked Wines. In addition to that, CSW Industrials, is 1.2 times more volatile than Naked Wines plc. It trades about -0.18 of its total potential returns per unit of risk. Naked Wines plc is currently generating about 0.05 per unit of volatility. If you would invest  357.00  in Naked Wines plc on May 4, 2025 and sell it today you would earn a total of  17.00  from holding Naked Wines plc or generate 4.76% return on investment over 90 days.

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

CSW Industrials,  vs.  Naked Wines plc

CSW Industrials,

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSW Industrials, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Naked Wines plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Naked Wines plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Naked Wines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CSW Industrials, and Naked Wines

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

The idea behind CSW Industrials, and Naked Wines plc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.