Correlation Between Willamette Valley and CIMG
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and CIMG 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 CIMG 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 CIMG Inc, you can compare the effects of market volatilities on Willamette Valley and CIMG 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 CIMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and CIMG.
Diversification Opportunities for Willamette Valley and CIMG
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Willamette and CIMG is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and CIMG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMG Inc 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 CIMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMG Inc has no effect on the direction of Willamette Valley i.e., Willamette Valley and CIMG go up and down completely randomly.
Pair Corralation between Willamette Valley and CIMG
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to generate 0.13 times more return on investment than CIMG. However, Willamette Valley Vineyards is 7.48 times less risky than CIMG. It trades about -0.03 of its potential returns per unit of risk. CIMG Inc is currently generating about -0.11 per unit of risk. If you would invest 335.00 in Willamette Valley Vineyards on August 28, 2024 and sell it today you would lose (4.00) from holding Willamette Valley Vineyards or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. CIMG Inc
Performance |
| Timeline |
| Willamette Valley |
| CIMG Inc |
Willamette Valley and CIMG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and CIMG
The main advantage of trading using opposite Willamette Valley and CIMG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, CIMG 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 CIMG will offset losses from the drop in CIMG'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 |
| CIMG vs. RLX Technology | CIMG vs. First Ship Lease | CIMG vs. Willamette Valley Vineyards | CIMG vs. Keurig Dr Pepper |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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