Correlation Between Golden Matrix and Willamette Valley

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

By analyzing existing cross correlation between Golden Matrix Group and Willamette Valley Vineyards, you can compare the effects of market volatilities on Golden Matrix and Willamette Valley 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 Golden Matrix with a short position of Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Matrix and Willamette Valley.

Diversification Opportunities for Golden Matrix and Willamette Valley

-0.09

Correlation Coefficient

Golden Matrix  Willamette Valley

Good diversification

The 3 months correlation between Golden and Willamette is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Golden Matrix Group and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley and Golden Matrix 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 Golden Matrix Group are associated (or correlated) with Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Golden Matrix i.e., Golden Matrix and Willamette Valley go up and down completely randomly.

Pair Corralation between Golden Matrix and Willamette Valley

Given the investment horizon of 90 days Golden Matrix Group is expected to generate 2.58 times more return on investment than Willamette Valley. However, Golden Matrix is 2.58 times more volatile than Willamette Valley Vineyards. It trades about 0.01 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about -0.02 per unit of risk. If you would invest  326.00  in Golden Matrix Group on October 22, 2024 and sell it today you would lose (122.00) from holding Golden Matrix Group or give up 37.42% of portfolio value over 90 days.

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

Golden Matrix Group  vs.  Willamette Valley Vineyards

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Golden Matrix is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Willamette Valley

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Willamette Valley demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Matrix and Willamette Valley

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

The idea behind Golden Matrix Group and Willamette Valley 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.