Correlation Between Fednat Holding and Duckhorn Portfolio

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

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

Diversification Opportunities for Fednat Holding and Duckhorn Portfolio

0.43

Correlation Coefficient

Fednat Holding  Duckhorn Portfolio

Very weak diversification

The 3 months correlation between Fednat and Duckhorn is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fednat Holding Co and Duckhorn Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duckhorn Portfolio and Fednat Holding 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 Fednat Holding Co 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 Fednat Holding i.e., Fednat Holding and Duckhorn Portfolio go up and down completely randomly.

Pair Corralation between Fednat Holding and Duckhorn Portfolio

If you would invest  0.16  in Fednat Holding Co on March 12, 2024 and sell it today you would earn a total of  0.00  from holding Fednat Holding Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.38%
Values	Daily Returns

Fednat Holding Co  vs.  Duckhorn Portfolio

Fednat Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fednat Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Fednat Holding is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Duckhorn Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duckhorn Portfolio 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 somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fednat Holding and Duckhorn Portfolio

The main advantage of trading using opposite Fednat Holding and Duckhorn Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fednat Holding 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 Fednat Holding Co 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.