Correlation Between Willamette Valley and Altria
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Willamette Valley and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and Altria.
Diversification Opportunities for Willamette Valley and Altria
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Willamette and Altria is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Willamette Valley i.e., Willamette Valley and Altria go up and down completely randomly.
Pair Corralation between Willamette Valley and Altria
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the Altria. In addition to that, Willamette Valley is 1.36 times more volatile than Altria Group. It trades about -0.09 of its total potential returns per unit of risk. Altria Group is currently generating about 0.11 per unit of volatility. If you would invest 5,303 in Altria Group on September 3, 2024 and sell it today you would earn a total of 471.00 from holding Altria Group or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. Altria Group
Performance |
| Timeline |
| Willamette Valley |
| Altria Group |
Willamette Valley and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and Altria
The main advantage of trading using opposite Willamette Valley and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria'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 |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |