Correlation Between Crimson Wine and Duckhorn Portfolio
Can any of the company-specific risk be diversified away by investing in both Crimson Wine and Duckhorn Portfolio 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 Crimson Wine and Duckhorn Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crimson Wine and Duckhorn Portfolio, you can compare the effects of market volatilities on Crimson Wine and Duckhorn Portfolio 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 Crimson Wine with a short position of Duckhorn Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crimson Wine and Duckhorn Portfolio.
Diversification Opportunities for Crimson Wine and Duckhorn Portfolio
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crimson and Duckhorn is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Duckhorn Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duckhorn Portfolio and Crimson Wine 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 Crimson Wine are associated (or correlated) with Duckhorn Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duckhorn Portfolio has no effect on the direction of Crimson Wine i.e., Crimson Wine and Duckhorn Portfolio go up and down completely randomly.
Pair Corralation between Crimson Wine and Duckhorn Portfolio
Given the investment horizon of 90 days Crimson Wine is expected to generate 8.14 times less return on investment than Duckhorn Portfolio. But when comparing it to its historical volatility, Crimson Wine is 6.11 times less risky than Duckhorn Portfolio. It trades about 0.14 of its potential returns per unit of risk. Duckhorn Portfolio is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 611.00 in Duckhorn Portfolio on July 10, 2024 and sell it today you would earn a total of 485.00 from holding Duckhorn Portfolio or generate 79.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Crimson Wine vs. Duckhorn Portfolio
Performance |
Timeline |
Crimson Wine |
Duckhorn Portfolio |
Crimson Wine and Duckhorn Portfolio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Crimson Wine and Duckhorn Portfolio
The main advantage of trading using opposite Crimson Wine and Duckhorn Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crimson Wine position performs unexpectedly, Duckhorn Portfolio 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 Duckhorn Portfolio will offset losses from the drop in Duckhorn Portfolio's long position.Crimson Wine vs. Pernod Ricard SA | Crimson Wine vs. Naked Wines plc | Crimson Wine vs. Willamette Valley Vineyards | Crimson Wine vs. Brown Forman |
Duckhorn Portfolio vs. Naked Wines plc | Duckhorn Portfolio vs. Iconic Brands | Duckhorn Portfolio vs. Crimson Wine | Duckhorn Portfolio vs. Treasury Wine Estates |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |