Correlation Between Willamette Valley and Brunswick
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and Brunswick 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 Willamette Valley and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willamette Valley Vineyards and Brunswick, you can compare the effects of market volatilities on Willamette Valley and Brunswick 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 Willamette Valley with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and Brunswick.
Diversification Opportunities for Willamette Valley and Brunswick
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Willamette and Brunswick is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Willamette Valley 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 Willamette Valley Vineyards are associated (or correlated) with Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Willamette Valley i.e., Willamette Valley and Brunswick go up and down completely randomly.
Pair Corralation between Willamette Valley and Brunswick
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the Brunswick. But the stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 2.25 times less risky than Brunswick. The stock trades about -0.2 of its potential returns per unit of risk. The Brunswick is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,117 in Brunswick on August 31, 2024 and sell it today you would lose (55.00) from holding Brunswick or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. Brunswick
Performance |
| Timeline |
| Willamette Valley |
| Brunswick |
Willamette Valley and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and Brunswick
The main advantage of trading using opposite Willamette Valley and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Andrew Peller Limited | Willamette Valley vs. Iconic Brands | Willamette Valley vs. Naked Wines plc |
| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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