Correlation Between Eastside Distilling and Heritage Distilling
Can any of the company-specific risk be diversified away by investing in both Eastside Distilling and Heritage Distilling 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 Eastside Distilling and Heritage Distilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastside Distilling and Heritage Distilling Holding, you can compare the effects of market volatilities on Eastside Distilling and Heritage Distilling 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 Eastside Distilling with a short position of Heritage Distilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and Heritage Distilling.
Diversification Opportunities for Eastside Distilling and Heritage Distilling
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eastside and Heritage is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Heritage Distilling Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Distilling and Eastside Distilling 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 Eastside Distilling are associated (or correlated) with Heritage Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Distilling has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Heritage Distilling go up and down completely randomly.
Pair Corralation between Eastside Distilling and Heritage Distilling
Given the investment horizon of 90 days Eastside Distilling is expected to generate 1.83 times more return on investment than Heritage Distilling. However, Eastside Distilling is 1.83 times more volatile than Heritage Distilling Holding. It trades about 0.03 of its potential returns per unit of risk. Heritage Distilling Holding is currently generating about -0.33 per unit of risk. If you would invest 97.00 in Eastside Distilling on September 14, 2024 and sell it today you would lose (26.00) from holding Eastside Distilling or give up 26.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.95% |
| Values | Daily Returns |
Eastside Distilling vs. Heritage Distilling Holding
Performance |
| Timeline |
| Eastside Distilling |
| Heritage Distilling |
Eastside Distilling and Heritage Distilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastside Distilling and Heritage Distilling
The main advantage of trading using opposite Eastside Distilling and Heritage Distilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastside Distilling position performs unexpectedly, Heritage Distilling 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 Heritage Distilling will offset losses from the drop in Heritage Distilling's long position.| Eastside Distilling vs. Iconic Brands | Eastside Distilling vs. Andrew Peller Limited | Eastside Distilling vs. Splash Beverage Group | Eastside Distilling vs. Fresh Grapes LLC |
| Heritage Distilling vs. Fresh Grapes LLC | Heritage Distilling vs. Eastside Distilling | Heritage Distilling vs. Willamette Valley Vineyards | Heritage Distilling vs. Diageo PLC ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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