Correlation Between Willamette Valley and Yancoal Australia

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

Diversification Opportunities for Willamette Valley and Yancoal Australia

0.0

Correlation Coefficient

Willamette Valley  Yancoal Australia

Pay attention - limited upside

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

Pair Corralation between Willamette Valley and Yancoal Australia

If you would invest  0.00  in Yancoal Australia on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Yancoal Australia or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Willamette Valley Vineyards  vs.  Yancoal Australia

Willamette Valley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Willamette Valley Vineyards has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Yancoal Australia is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Willamette Valley and Yancoal Australia

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

The idea behind Willamette Valley Vineyards and Yancoal Australia 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..