Correlation Between PENSKE and Willamette Valley
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By analyzing existing cross correlation between PENSKE 57 01 FEB 28 and Willamette Valley Vineyards, you can compare the effects of market volatilities on PENSKE 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 PENSKE with a short position of Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENSKE and Willamette Valley.
Diversification Opportunities for PENSKE and Willamette Valley
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PENSKE and Willamette is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PENSKE 57 01 FEB 28 and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley and PENSKE 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 PENSKE 57 01 FEB 28 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 PENSKE i.e., PENSKE and Willamette Valley go up and down completely randomly.
Pair Corralation between PENSKE and Willamette Valley
Assuming the 90 days trading horizon PENSKE 57 01 FEB 28 is expected to under-perform the Willamette Valley. But the bond apears to be less risky and, when comparing its historical volatility, PENSKE 57 01 FEB 28 is 1.93 times less risky than Willamette Valley. The bond trades about -0.24 of its potential returns per unit of risk. The Willamette Valley Vineyards is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 340.00 in Willamette Valley Vineyards on September 5, 2024 and sell it today you would lose (9.00) from holding Willamette Valley Vineyards or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 45.45% |
| Values | Daily Returns |
PENSKE 57 01 FEB 28 vs. Willamette Valley Vineyards
Performance |
| Timeline |
| PENSKE 57 01 |
| Willamette Valley |
PENSKE and Willamette Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENSKE and Willamette Valley
The main advantage of trading using opposite PENSKE and Willamette Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENSKE 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.The idea behind PENSKE 57 01 FEB 28 and Willamette Valley Vineyards pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Pernod Ricard SA | Willamette Valley vs. Crimson Wine |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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