Correlation Between Splash Beverage and Duckhorn Portfolio

Can any of the company-specific risk be diversified away by investing in both Splash Beverage and Duckhorn Portfolio 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 Splash Beverage and Duckhorn Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Splash Beverage Group and Duckhorn Portfolio, you can compare the effects of market volatilities on Splash Beverage and Duckhorn Portfolio 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 Splash Beverage with a short position of Duckhorn Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Splash Beverage and Duckhorn Portfolio.

Diversification Opportunities for Splash Beverage and Duckhorn Portfolio

-0.46

Correlation Coefficient

Splash Beverage  Duckhorn Portfolio

Very good diversification

The 3 months correlation between Splash and Duckhorn is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Splash Beverage Group and Duckhorn Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duckhorn Portfolio and Splash Beverage 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 Splash Beverage Group are associated (or correlated) with Duckhorn Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duckhorn Portfolio has no effect on the direction of Splash Beverage i.e., Splash Beverage and Duckhorn Portfolio go up and down completely randomly.

Pair Corralation between Splash Beverage and Duckhorn Portfolio

Given the investment horizon of 90 days Splash Beverage Group is expected to under-perform the Duckhorn Portfolio. In addition to that, Splash Beverage is 27.65 times more volatile than Duckhorn Portfolio. It trades about -0.25 of its total potential returns per unit of risk. Duckhorn Portfolio is currently generating about 0.14 per unit of volatility. If you would invest  1,104  in Duckhorn Portfolio on September 19, 2024 and sell it today you would earn a total of  5.00  from holding Duckhorn Portfolio or generate 0.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Splash Beverage Group  vs.  Duckhorn Portfolio

Splash Beverage Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Splash Beverage Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Duckhorn Portfolio

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Duckhorn Portfolio are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Duckhorn Portfolio sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Splash Beverage and Duckhorn Portfolio

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

The idea behind Splash Beverage Group and Duckhorn Portfolio 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.