Correlation Between Eastside Distilling and Fresh Grapes

Can any of the company-specific risk be diversified away by investing in both Eastside Distilling and Fresh Grapes 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 Eastside Distilling and Fresh Grapes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastside Distilling and Fresh Grapes LLC, you can compare the effects of market volatilities on Eastside Distilling and Fresh Grapes 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 Eastside Distilling with a short position of Fresh Grapes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and Fresh Grapes.

Diversification Opportunities for Eastside Distilling and Fresh Grapes

0.37

Correlation Coefficient

Eastside Distilling  Fresh Grapes

Weak diversification

The 3 months correlation between Eastside and Fresh is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Fresh Grapes LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Grapes LLC and Eastside Distilling 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 Eastside Distilling are associated (or correlated) with Fresh Grapes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Grapes LLC has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Fresh Grapes go up and down completely randomly.

Pair Corralation between Eastside Distilling and Fresh Grapes

Given the investment horizon of 90 days Eastside Distilling is expected to generate 1.03 times more return on investment than Fresh Grapes. However, Eastside Distilling is 1.03 times more volatile than Fresh Grapes LLC. It trades about -0.08 of its potential returns per unit of risk. Fresh Grapes LLC is currently generating about -0.12 per unit of risk. If you would invest  117.00  in Eastside Distilling on January 29, 2024 and sell it today you would lose (15.00) from holding Eastside Distilling or give up 12.82% of portfolio value over 90 days.

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

Eastside Distilling  vs.  Fresh Grapes LLC

Eastside Distilling

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eastside Distilling are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Eastside Distilling may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Fresh Grapes LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Grapes LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Eastside Distilling and Fresh Grapes

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

The idea behind Eastside Distilling and Fresh Grapes LLC 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 Stocks Directory module to find actively traded stocks across global markets.