Correlation Between Willamette Valley and Acco Brands

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

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

Diversification Opportunities for Willamette Valley and Acco Brands

-0.52

Correlation Coefficient

Willamette Valley  Acco Brands

Excellent diversification

The 3 months correlation between Willamette and Acco is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Willamette Valley 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 Willamette Valley Vineyards are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Willamette Valley i.e., Willamette Valley and Acco Brands go up and down completely randomly.

Pair Corralation between Willamette Valley and Acco Brands

Given the investment horizon of 90 days Willamette Valley Vineyards is expected to generate 1.4 times more return on investment than Acco Brands. However, Willamette Valley is 1.4 times more volatile than Acco Brands. It trades about 0.24 of its potential returns per unit of risk. Acco Brands is currently generating about -0.08 per unit of risk. If you would invest  344.00  in Willamette Valley Vineyards on December 26, 2024 and sell it today you would earn a total of  257.62  from holding Willamette Valley Vineyards or generate 74.89% return on investment over 90 days.

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

Willamette Valley Vineyards  vs.  Acco Brands

Willamette Valley

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 18 (%) 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.

Acco Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Willamette Valley and Acco Brands

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

The idea behind Willamette Valley Vineyards and Acco Brands 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..