Correlation Between Glory Star and Duckhorn Portfolio

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

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

Diversification Opportunities for Glory Star and Duckhorn Portfolio

0.41

Correlation Coefficient

Glory Star  Duckhorn Portfolio

Very weak diversification

The 3 months correlation between Glory and Duckhorn is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Glory Star New and Duckhorn Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duckhorn Portfolio and Glory Star 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 Glory Star New 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 Glory Star i.e., Glory Star and Duckhorn Portfolio go up and down completely randomly.

Pair Corralation between Glory Star and Duckhorn Portfolio

Assuming the 90 days horizon Glory Star New is expected to generate 9.93 times more return on investment than Duckhorn Portfolio. However, Glory Star is 9.93 times more volatile than Duckhorn Portfolio. It trades about 0.15 of its potential returns per unit of risk. Duckhorn Portfolio is currently generating about -0.15 per unit of risk. If you would invest  0.41  in Glory Star New on January 31, 2024 and sell it today you would earn a total of  0.08  from holding Glory Star New or generate 19.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	80.95%
Values	Daily Returns

Glory Star New  vs.  Duckhorn Portfolio

Glory Star New

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glory Star New are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Glory Star showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Glory Star and Duckhorn Portfolio

The main advantage of trading using opposite Glory Star and Duckhorn Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glory Star 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 Glory Star New 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.