Correlation Between Heritage Distilling and Brown Forman

Can any of the company-specific risk be diversified away by investing in both Heritage Distilling and Brown Forman 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 Heritage Distilling and Brown Forman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heritage Distilling Holding and Brown Forman, you can compare the effects of market volatilities on Heritage Distilling and Brown Forman 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 Heritage Distilling with a short position of Brown Forman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Distilling and Brown Forman.

Diversification Opportunities for Heritage Distilling and Brown Forman

0.41

Correlation Coefficient

Heritage Distilling  Brown Forman

Very weak diversification

The 3 months correlation between Heritage and Brown is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Distilling Holding and Brown Forman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Forman and Heritage Distilling 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 Heritage Distilling Holding are associated (or correlated) with Brown Forman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Forman has no effect on the direction of Heritage Distilling i.e., Heritage Distilling and Brown Forman go up and down completely randomly.

Pair Corralation between Heritage Distilling and Brown Forman

Given the investment horizon of 90 days Heritage Distilling Holding is expected to generate 2.87 times more return on investment than Brown Forman. However, Heritage Distilling is 2.87 times more volatile than Brown Forman. It trades about 0.06 of its potential returns per unit of risk. Brown Forman is currently generating about -0.06 per unit of risk. If you would invest  50.00  in Heritage Distilling Holding on May 7, 2025 and sell it today you would earn a total of  4.00  from holding Heritage Distilling Holding or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Heritage Distilling Holding  vs.  Brown Forman

Heritage Distilling

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heritage Distilling Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Heritage Distilling disclosed solid returns over the last few months and may actually be approaching a breakup point.

Brown Forman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brown Forman has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Heritage Distilling and Brown Forman

The main advantage of trading using opposite Heritage Distilling and Brown Forman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Distilling position performs unexpectedly, Brown Forman 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 Brown Forman will offset losses from the drop in Brown Forman's long position.

The idea behind Heritage Distilling Holding and Brown Forman pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.