Correlation Between Willamette Valley and XBP Europe
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and XBP Europe 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 XBP Europe 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 XBP Europe Holdings, you can compare the effects of market volatilities on Willamette Valley and XBP Europe 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 XBP Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and XBP Europe.
Diversification Opportunities for Willamette Valley and XBP Europe
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Willamette and XBP is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and XBP Europe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBP Europe Holdings 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 XBP Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBP Europe Holdings has no effect on the direction of Willamette Valley i.e., Willamette Valley and XBP Europe go up and down completely randomly.
Pair Corralation between Willamette Valley and XBP Europe
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to generate 0.2 times more return on investment than XBP Europe. However, Willamette Valley Vineyards is 5.09 times less risky than XBP Europe. It trades about -0.09 of its potential returns per unit of risk. XBP Europe Holdings is currently generating about -0.14 per unit of risk. If you would invest 337.00 in Willamette Valley Vineyards on September 13, 2024 and sell it today you would lose (8.00) from holding Willamette Valley Vineyards or give up 2.37% 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. XBP Europe Holdings
Performance |
| Timeline |
| Willamette Valley |
| XBP Europe Holdings |
Willamette Valley and XBP Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and XBP Europe
The main advantage of trading using opposite Willamette Valley and XBP Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, XBP Europe 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 XBP Europe will offset losses from the drop in XBP Europe'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 |
| XBP Europe vs. Evertec | XBP Europe vs. Consensus Cloud Solutions | XBP Europe vs. Global Blue Group | XBP Europe vs. NetScout Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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