Correlation Between Eastside Distilling and Willamette Valley
Can any of the company-specific risk be diversified away by investing in both Eastside Distilling and Willamette Valley 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 Willamette Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastside Distilling and Willamette Valley Vineyards, you can compare the effects of market volatilities on Eastside Distilling and Willamette Valley 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 Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and Willamette Valley.
Diversification Opportunities for Eastside Distilling and Willamette Valley
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastside and Willamette is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Willamette Valley go up and down completely randomly.
Pair Corralation between Eastside Distilling and Willamette Valley
Given the investment horizon of 90 days Eastside Distilling is expected to under-perform the Willamette Valley. In addition to that, Eastside Distilling is 1.97 times more volatile than Willamette Valley Vineyards. It trades about -0.03 of its total potential returns per unit of risk. Willamette Valley Vineyards is currently generating about 0.1 per unit of volatility. If you would invest 357.00 in Willamette Valley Vineyards on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Willamette Valley Vineyards or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastside Distilling vs. Willamette Valley Vineyards
Performance |
| Timeline |
| Eastside Distilling |
| Willamette Valley |
Eastside Distilling and Willamette Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastside Distilling and Willamette Valley
The main advantage of trading using opposite Eastside Distilling and Willamette Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastside Distilling position performs unexpectedly, Willamette Valley 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 Willamette Valley will offset losses from the drop in Willamette Valley's long position.| Eastside Distilling vs. Naked Wines plc | Eastside Distilling vs. Andrew Peller Limited | Eastside Distilling vs. Iconic Brands | Eastside Distilling vs. Naked Wines plc |
| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Pernod Ricard SA | Willamette Valley vs. Brown Forman | Willamette Valley vs. Treasury Wine Estates |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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