Correlation Between Andrew Peller and Fresh Grapes

Can any of the company-specific risk be diversified away by investing in both Andrew Peller and Fresh Grapes 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 Fresh Grapes 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 Fresh Grapes LLC, you can compare the effects of market volatilities on Andrew Peller and Fresh Grapes 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 Fresh Grapes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andrew Peller and Fresh Grapes.

Diversification Opportunities for Andrew Peller and Fresh Grapes

-0.28

Correlation Coefficient

Andrew Peller  Fresh Grapes

Very good diversification

The 3 months correlation between Andrew and Fresh is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Andrew Peller Limited and Fresh Grapes LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Grapes LLC 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 Fresh Grapes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Grapes LLC has no effect on the direction of Andrew Peller i.e., Andrew Peller and Fresh Grapes go up and down completely randomly.

Pair Corralation between Andrew Peller and Fresh Grapes

Assuming the 90 days horizon Andrew Peller Limited is expected to generate 0.25 times more return on investment than Fresh Grapes. However, Andrew Peller Limited is 3.93 times less risky than Fresh Grapes. It trades about 0.16 of its potential returns per unit of risk. Fresh Grapes LLC is currently generating about 0.03 per unit of risk. If you would invest  278.00  in Andrew Peller Limited on December 28, 2024 and sell it today you would earn a total of  50.00  from holding Andrew Peller Limited or generate 17.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Andrew Peller Limited  vs.  Fresh Grapes LLC

Andrew Peller Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Andrew Peller Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Andrew Peller reported solid returns over the last few months and may actually be approaching a breakup point.

Fresh Grapes LLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Grapes LLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Fresh Grapes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Andrew Peller and Fresh Grapes

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

The idea behind Andrew Peller Limited and Fresh Grapes LLC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.