Correlation Between Willamette Valley and OFX Group
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and OFX Group 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 OFX Group 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 OFX Group Ltd, you can compare the effects of market volatilities on Willamette Valley and OFX Group 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 OFX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and OFX Group.
Diversification Opportunities for Willamette Valley and OFX Group
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Willamette and OFX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and OFX Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFX 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 OFX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFX Group has no effect on the direction of Willamette Valley i.e., Willamette Valley and OFX Group go up and down completely randomly.
Pair Corralation between Willamette Valley and OFX Group
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to generate 0.59 times more return on investment than OFX Group. However, Willamette Valley Vineyards is 1.69 times less risky than OFX Group. It trades about 0.01 of its potential returns per unit of risk. OFX Group Ltd is currently generating about -0.01 per unit of risk. If you would invest 607.00 in Willamette Valley Vineyards on January 12, 2025 and sell it today you would lose (12.00) from holding Willamette Valley Vineyards or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. OFX Group Ltd
Performance |
| Timeline |
| Willamette Valley |
| OFX Group |
Willamette Valley and OFX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and OFX Group
The main advantage of trading using opposite Willamette Valley and OFX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, OFX Group 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 OFX Group will offset losses from the drop in OFX Group's long position.| Willamette Valley vs. Brown Forman | Willamette Valley vs. Brown Forman | Willamette Valley vs. Constellation Brands Class | Willamette Valley vs. Pernod Ricard SA |
| OFX Group vs. Universal Display | OFX Group vs. Hasbro Inc | OFX Group vs. Ameriprise Financial | OFX Group vs. Canlan Ice Sports |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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