Correlation Between Naked Wines and Becle SA

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

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

Diversification Opportunities for Naked Wines and Becle SA

0.09

Correlation Coefficient

Naked Wines  Becle SA

Significant diversification

The 3 months correlation between Naked and Becle is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc and Becle SA de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SA de and Naked Wines 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 Naked Wines plc are associated (or correlated) with Becle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SA de has no effect on the direction of Naked Wines i.e., Naked Wines and Becle SA go up and down completely randomly.

Pair Corralation between Naked Wines and Becle SA

Assuming the 90 days horizon Naked Wines plc is expected to under-perform the Becle SA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Naked Wines plc is 5.16 times less risky than Becle SA. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Becle SA de is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Becle SA de on May 7, 2025 and sell it today you would lose (4.00) from holding Becle SA de or give up 3.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Naked Wines plc  vs.  Becle SA de

Naked Wines plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Naked Wines plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Becle SA de

Risk-Adjusted Performance

Weakest

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

Pair Trading with Naked Wines and Becle SA

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

The idea behind Naked Wines plc and Becle SA de 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.