Correlation Between Duckhorn Portfolio and HydroGraph Clean

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

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

Diversification Opportunities for Duckhorn Portfolio and HydroGraph Clean

-0.24

Correlation Coefficient

Duckhorn Portfolio  HydroGraph Clean

Very good diversification

The 3 months correlation between Duckhorn and HydroGraph is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Duckhorn Portfolio and HydroGraph Clean Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HydroGraph Clean Power and Duckhorn Portfolio 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 Duckhorn Portfolio are associated (or correlated) with HydroGraph Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HydroGraph Clean Power has no effect on the direction of Duckhorn Portfolio i.e., Duckhorn Portfolio and HydroGraph Clean go up and down completely randomly.

Pair Corralation between Duckhorn Portfolio and HydroGraph Clean

Given the investment horizon of 90 days Duckhorn Portfolio is expected to under-perform the HydroGraph Clean. But the stock apears to be less risky and, when comparing its historical volatility, Duckhorn Portfolio is 2.89 times less risky than HydroGraph Clean. The stock trades about -0.15 of its potential returns per unit of risk. The HydroGraph Clean Power is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  6.80  in HydroGraph Clean Power on January 31, 2024 and sell it today you would earn a total of  1.70  from holding HydroGraph Clean Power or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Duckhorn Portfolio  vs.  HydroGraph Clean Power

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 somewhat strong basic indicators, Duckhorn Portfolio is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

HydroGraph Clean Power

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HydroGraph Clean Power are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, HydroGraph Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duckhorn Portfolio and HydroGraph Clean

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

The idea behind Duckhorn Portfolio and HydroGraph Clean Power 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.