Correlation Between Crimson Wine and Scheid Vineyards

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

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

Diversification Opportunities for Crimson Wine and Scheid Vineyards

0.0

Correlation Coefficient

Crimson Wine  Scheid Vineyards

Pay attention - limited upside

The 3 months correlation between Crimson and Scheid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Scheid Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scheid Vineyards 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 Scheid Vineyards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scheid Vineyards has no effect on the direction of Crimson Wine i.e., Crimson Wine and Scheid Vineyards go up and down completely randomly.

Pair Corralation between Crimson Wine and Scheid Vineyards

If you would invest (100.00) in Scheid Vineyards on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Scheid Vineyards or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Crimson Wine  vs.  Scheid Vineyards

Crimson Wine

Risk-Adjusted Performance

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.

Scheid Vineyards

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scheid Vineyards has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Scheid Vineyards is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Crimson Wine and Scheid Vineyards

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

The idea behind Crimson Wine and Scheid Vineyards 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.