Correlation Between Crimson Wine and Otc Markets

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

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

Diversification Opportunities for Crimson Wine and Otc Markets

-0.25

Correlation Coefficient

Crimson Wine  Otc Markets

Very good diversification

The 3 months correlation between Crimson and Otc is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Otc Markets Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otc Markets Group 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 Otc Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otc Markets Group has no effect on the direction of Crimson Wine i.e., Crimson Wine and Otc Markets go up and down completely randomly.

Pair Corralation between Crimson Wine and Otc Markets

Given the investment horizon of 90 days Crimson Wine is expected to generate 0.9 times more return on investment than Otc Markets. However, Crimson Wine is 1.11 times less risky than Otc Markets. It trades about 0.01 of its potential returns per unit of risk. Otc Markets Group is currently generating about 0.01 per unit of risk. If you would invest  590.00  in Crimson Wine on October 10, 2024 and sell it today you would earn a total of  22.00  from holding Crimson Wine or generate 3.73% return on investment over 90 days.

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

Crimson Wine  vs.  Otc Markets Group

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.

Otc Markets Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Otc Markets Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Otc Markets may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Crimson Wine and Otc Markets

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

The idea behind Crimson Wine and Otc Markets Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..