Correlation Between US Global and Willamette Valley
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Willamette Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Willamette Valley Vineyards, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Willamette Valley.
Diversification Opportunities for US Global and Willamette Valley
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GROW and Willamette is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley and US Global 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 US Global Investors 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 US Global i.e., US Global and Willamette Valley go up and down completely randomly.
Pair Corralation between US Global and Willamette Valley
Given the investment horizon of 90 days US Global Investors is expected to under-perform the Willamette Valley. But the stock apears to be less risky and, when comparing its historical volatility, US Global Investors is 1.43 times less risky than Willamette Valley. The stock trades about -0.07 of its potential returns per unit of risk. The Willamette Valley Vineyards is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Willamette Valley Vineyards on August 29, 2024 and sell it today you would lose (13.00) from holding Willamette Valley Vineyards or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Willamette Valley Vineyards
Performance |
| Timeline |
| US Global Investors |
| Willamette Valley |
US Global and Willamette Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Willamette Valley
The main advantage of trading using opposite US Global and Willamette Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| Willamette Valley vs. Andrew Peller Limited | Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Willamette Valley Vineyards | Willamette Valley vs. The Tinley Beverage |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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