Correlation Between Eastside Distilling and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both Eastside Distilling and Vodka Brands 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 Vodka Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastside Distilling and Vodka Brands Corp, you can compare the effects of market volatilities on Eastside Distilling and Vodka Brands 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and Vodka Brands.
Diversification Opportunities for Eastside Distilling and Vodka Brands
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastside and Vodka is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Vodka Brands go up and down completely randomly.
Pair Corralation between Eastside Distilling and Vodka Brands
Given the investment horizon of 90 days Eastside Distilling is expected to under-perform the Vodka Brands. In addition to that, Eastside Distilling is 1.09 times more volatile than Vodka Brands Corp. It trades about -0.01 of its total potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.03 per unit of volatility. If you would invest 200.00 in Vodka Brands Corp on September 2, 2024 and sell it today you would lose (88.00) from holding Vodka Brands Corp or give up 44.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Eastside Distilling vs. Vodka Brands Corp
Performance |
| Timeline |
| Eastside Distilling |
| Vodka Brands Corp |
Eastside Distilling and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastside Distilling and Vodka Brands
The main advantage of trading using opposite Eastside Distilling and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastside Distilling position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.| Eastside Distilling vs. Brown Forman | Eastside Distilling vs. Duckhorn Portfolio | Eastside Distilling vs. Brown Forman | Eastside Distilling vs. Constellation Brands Class |
| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Pernod Ricard SA | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Brown Forman |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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