Correlation Between Willamette Valley and Kaltura
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and Kaltura 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 Kaltura 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 Kaltura, you can compare the effects of market volatilities on Willamette Valley and Kaltura 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 Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and Kaltura.
Diversification Opportunities for Willamette Valley and Kaltura
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Willamette and Kaltura is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura 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 Kaltura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaltura has no effect on the direction of Willamette Valley i.e., Willamette Valley and Kaltura go up and down completely randomly.
Pair Corralation between Willamette Valley and Kaltura
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the Kaltura. But the stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 1.86 times less risky than Kaltura. The stock trades about -0.07 of its potential returns per unit of risk. The Kaltura is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Kaltura on August 27, 2024 and sell it today you would earn a total of 36.00 from holding Kaltura or generate 20.69% 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. Kaltura
Performance |
| Timeline |
| Willamette Valley |
| Kaltura |
Willamette Valley and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and Kaltura
The main advantage of trading using opposite Willamette Valley and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, Kaltura 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 Kaltura will offset losses from the drop in Kaltura'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 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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