Correlation Between Crimson Wine and Elutia

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

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

Diversification Opportunities for Crimson Wine and Elutia

-0.22

Correlation Coefficient

Crimson Wine  Elutia

Very good diversification

The 3 months correlation between Crimson and Elutia is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc 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 Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Crimson Wine i.e., Crimson Wine and Elutia go up and down completely randomly.

Pair Corralation between Crimson Wine and Elutia

Given the investment horizon of 90 days Crimson Wine is expected to generate 10.47 times less return on investment than Elutia. But when comparing it to its historical volatility, Crimson Wine is 3.97 times less risky than Elutia. It trades about 0.01 of its potential returns per unit of risk. Elutia Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  390.00  in Elutia Inc on October 10, 2024 and sell it today you would lose (50.00) from holding Elutia Inc or give up 12.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Crimson Wine  vs.  Elutia Inc

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 latest fragile performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Elutia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elutia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Elutia is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Crimson Wine and Elutia

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

The idea behind Crimson Wine and Elutia Inc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.