Correlation Between Willamette Valley and Global Net
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Willamette Valley and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and Global Net.
Diversification Opportunities for Willamette Valley and Global Net
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Willamette and Global is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Willamette Valley i.e., Willamette Valley and Global Net go up and down completely randomly.
Pair Corralation between Willamette Valley and Global Net
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the Global Net. In addition to that, Willamette Valley is 1.36 times more volatile than Global Net Lease. It trades about -0.06 of its total potential returns per unit of risk. Global Net Lease is currently generating about 0.07 per unit of volatility. If you would invest 1,788 in Global Net Lease on August 30, 2024 and sell it today you would earn a total of 551.00 from holding Global Net Lease or generate 30.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 62.1% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. Global Net Lease
Performance |
| Timeline |
| Willamette Valley |
| Global Net Lease |
Willamette Valley and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and Global Net
The main advantage of trading using opposite Willamette Valley and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.The idea behind Willamette Valley Vineyards and Global Net Lease 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.| Global Net vs. Boston Properties | Global Net vs. Douglas Emmett | Global Net vs. Kilroy Realty Corp | Global Net vs. Highwoods Properties |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |