Correlation Between Fresh Grapes and Brown Forman
Can any of the company-specific risk be diversified away by investing in both Fresh Grapes and Brown Forman 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 Fresh Grapes and Brown Forman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Grapes LLC and Brown Forman, you can compare the effects of market volatilities on Fresh Grapes and Brown Forman 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 Fresh Grapes with a short position of Brown Forman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Grapes and Brown Forman.
Diversification Opportunities for Fresh Grapes and Brown Forman
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fresh and Brown is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Grapes LLC and Brown Forman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Forman and Fresh Grapes 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 Fresh Grapes LLC are associated (or correlated) with Brown Forman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Forman has no effect on the direction of Fresh Grapes i.e., Fresh Grapes and Brown Forman go up and down completely randomly.
Pair Corralation between Fresh Grapes and Brown Forman
Given the investment horizon of 90 days Fresh Grapes LLC is expected to generate 6.15 times more return on investment than Brown Forman. However, Fresh Grapes is 6.15 times more volatile than Brown Forman. It trades about -0.01 of its potential returns per unit of risk. Brown Forman is currently generating about -0.32 per unit of risk. If you would invest 88.00 in Fresh Grapes LLC on August 28, 2024 and sell it today you would lose (12.00) from holding Fresh Grapes LLC or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Grapes LLC vs. Brown Forman
Performance |
| Timeline |
| Fresh Grapes LLC |
| Brown Forman |
Fresh Grapes and Brown Forman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Grapes and Brown Forman
The main advantage of trading using opposite Fresh Grapes and Brown Forman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Grapes position performs unexpectedly, Brown Forman 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 Brown Forman will offset losses from the drop in Brown Forman's long position.| Fresh Grapes vs. Andrew Peller Limited | Fresh Grapes vs. Naked Wines plc | Fresh Grapes vs. Willamette Valley Vineyards | Fresh Grapes vs. Naked Wines plc |
| Brown Forman vs. Pernod Ricard SA | Brown Forman vs. Willamette Valley Vineyards | Brown Forman vs. MGP Ingredients | Brown Forman vs. Duckhorn Portfolio |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |