Correlation Between Andrew Peller and Crimson Wine

Can any of the company-specific risk be diversified away by investing in both Andrew Peller and Crimson Wine 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 Andrew Peller and Crimson Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Andrew Peller Limited and Crimson Wine, you can compare the effects of market volatilities on Andrew Peller and Crimson Wine 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 Andrew Peller with a short position of Crimson Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andrew Peller and Crimson Wine.

Diversification Opportunities for Andrew Peller and Crimson Wine

0.5

Correlation Coefficient

Andrew Peller  Crimson Wine

Very weak diversification

The 3 months correlation between Andrew and Crimson is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Andrew Peller Limited and Crimson Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crimson Wine and Andrew Peller 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 Andrew Peller Limited are associated (or correlated) with Crimson Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crimson Wine has no effect on the direction of Andrew Peller i.e., Andrew Peller and Crimson Wine go up and down completely randomly.

Pair Corralation between Andrew Peller and Crimson Wine

Assuming the 90 days horizon Andrew Peller is expected to generate 6.09 times less return on investment than Crimson Wine. In addition to that, Andrew Peller is 2.4 times more volatile than Crimson Wine. It trades about 0.0 of its total potential returns per unit of risk. Crimson Wine is currently generating about 0.02 per unit of volatility. If you would invest  596.00  in Crimson Wine on October 4, 2024 and sell it today you would earn a total of  39.00  from holding Crimson Wine or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	66.46%
Values	Daily Returns

Andrew Peller Limited  vs.  Crimson Wine

Andrew Peller Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andrew Peller Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Andrew Peller is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Crimson Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crimson Wine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Crimson Wine is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Andrew Peller and Crimson Wine

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

The idea behind Andrew Peller Limited and Crimson Wine 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.