Correlation Between Crimson Wine and Winmark
Can any of the company-specific risk be diversified away by investing in both Crimson Wine and Winmark 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 Crimson Wine and Winmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crimson Wine and Winmark, you can compare the effects of market volatilities on Crimson Wine and Winmark 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 Crimson Wine with a short position of Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crimson Wine and Winmark.
Diversification Opportunities for Crimson Wine and Winmark
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crimson and Winmark is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark and Crimson 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 Crimson Wine are associated (or correlated) with Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Crimson Wine i.e., Crimson Wine and Winmark go up and down completely randomly.
Pair Corralation between Crimson Wine and Winmark
Given the investment horizon of 90 days Crimson Wine is expected to generate 3.09 times less return on investment than Winmark. But when comparing it to its historical volatility, Crimson Wine is 1.19 times less risky than Winmark. It trades about 0.01 of its potential returns per unit of risk. Winmark is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 35,755 in Winmark on November 3, 2024 and sell it today you would earn a total of 3,204 from holding Winmark or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Crimson Wine vs. Winmark
Performance |
| Timeline |
| Crimson Wine |
| Winmark |
Crimson Wine and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crimson Wine and Winmark
The main advantage of trading using opposite Crimson Wine and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crimson Wine position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| Crimson Wine vs. Pernod Ricard SA | Crimson Wine vs. Naked Wines plc | Crimson Wine vs. Willamette Valley Vineyards | Crimson Wine vs. Brown Forman |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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