Correlation Between Crimson Wine and Eastside Distilling

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

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

Diversification Opportunities for Crimson Wine and Eastside Distilling

-0.6

Correlation Coefficient

Crimson Wine  Eastside Distilling

Excellent diversification

The 3 months correlation between Crimson and Eastside is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Eastside Distilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastside Distilling 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 Eastside Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastside Distilling has no effect on the direction of Crimson Wine i.e., Crimson Wine and Eastside Distilling go up and down completely randomly.

Pair Corralation between Crimson Wine and Eastside Distilling

Given the investment horizon of 90 days Crimson Wine is expected to generate 0.31 times more return on investment than Eastside Distilling. However, Crimson Wine is 3.27 times less risky than Eastside Distilling. It trades about 0.04 of its potential returns per unit of risk. Eastside Distilling is currently generating about -0.08 per unit of risk. If you would invest  599.00  in Crimson Wine on September 5, 2024 and sell it today you would earn a total of  31.00  from holding Crimson Wine or generate 5.18% return on investment over 90 days.

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

Crimson Wine  vs.  Eastside Distilling

Crimson Wine

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Crimson Wine are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Crimson Wine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eastside Distilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastside Distilling has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Crimson Wine and Eastside Distilling

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

The idea behind Crimson Wine and Eastside Distilling 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 CEOs Directory module to screen CEOs from public companies around the world.