Correlation Between Willamette Valley and Cortus Metals

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

Diversification Opportunities for Willamette Valley and Cortus Metals

0.0

Correlation Coefficient

Willamette Valley  Cortus Metals

Pay attention - limited upside

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

Pair Corralation between Willamette Valley and Cortus Metals

Assuming the 90 days horizon Willamette Valley Vineyards is expected to under-perform the Cortus Metals. But the preferred stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 9.04 times less risky than Cortus Metals. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Cortus Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Cortus Metals on October 10, 2024 and sell it today you would lose (6.81) from holding Cortus Metals or give up 48.64% of portfolio value over 90 days.

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

Willamette Valley Vineyards  vs.  Cortus Metals

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. Even with relatively invariable forward indicators, Willamette Valley is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Cortus Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cortus Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cortus Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Willamette Valley and Cortus Metals

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

The idea behind Willamette Valley Vineyards and Cortus Metals 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.