Correlation Between Willamette Valley and Cannae Holdings
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and Cannae Holdings 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 Cannae Holdings 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 Cannae Holdings, you can compare the effects of market volatilities on Willamette Valley and Cannae Holdings 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 Cannae Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and Cannae Holdings.
Diversification Opportunities for Willamette Valley and Cannae Holdings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Willamette and Cannae is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae Holdings 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 Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of Willamette Valley i.e., Willamette Valley and Cannae Holdings go up and down completely randomly.
Pair Corralation between Willamette Valley and Cannae Holdings
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the Cannae Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 1.35 times less risky than Cannae Holdings. The stock trades about -0.11 of its potential returns per unit of risk. The Cannae Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,994 in Cannae Holdings on September 4, 2024 and sell it today you would earn a total of 172.00 from holding Cannae Holdings or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. Cannae Holdings
Performance |
| Timeline |
| Willamette Valley |
| Cannae Holdings |
Willamette Valley and Cannae Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and Cannae Holdings
The main advantage of trading using opposite Willamette Valley and Cannae Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, Cannae Holdings 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 Cannae Holdings will offset losses from the drop in Cannae Holdings' 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 |
| Cannae Holdings vs. Brightsphere Investment Group | Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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