Correlation Between Crimson Wine and Andrew Peller

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

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

Diversification Opportunities for Crimson Wine and Andrew Peller

0.5

Correlation Coefficient

Crimson Wine  Andrew Peller

Very weak diversification

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

Pair Corralation between Crimson Wine and Andrew Peller

Given the investment horizon of 90 days Crimson Wine is expected to generate 0.42 times more return on investment than Andrew Peller. However, Crimson Wine is 2.4 times less risky than Andrew Peller. It trades about 0.02 of its potential returns per unit of risk. Andrew Peller Limited is currently generating about 0.0 per unit of risk. 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

Crimson Wine  vs.  Andrew Peller Limited

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.

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.

Pair Trading with Crimson Wine and Andrew Peller

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

The idea behind Crimson Wine and Andrew Peller Limited 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.