Correlation Between Willamette Valley and NetSol Technologies

Can any of the company-specific risk be diversified away by investing in both Willamette Valley and NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies, you can compare the effects of market volatilities on Willamette Valley and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and NetSol Technologies.

Diversification Opportunities for Willamette Valley and NetSol Technologies

0.5

Correlation Coefficient

Willamette Valley  NetSol Technologies

Very weak diversification

The 3 months correlation between Willamette and NetSol is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Willamette Valley i.e., Willamette Valley and NetSol Technologies go up and down completely randomly.

Pair Corralation between Willamette Valley and NetSol Technologies

Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the NetSol Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 1.01 times less risky than NetSol Technologies. The stock trades about -0.03 of its potential returns per unit of risk. The NetSol Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  267.00  in NetSol Technologies on October 14, 2024 and sell it today you would lose (2.00) from holding NetSol Technologies or give up 0.75% of portfolio value over 90 days.

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

Willamette Valley Vineyards  vs.  NetSol Technologies

Willamette Valley

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Willamette Valley is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Willamette Valley and NetSol Technologies

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

The idea behind Willamette Valley Vineyards and NetSol Technologies 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.