Correlation Between Coles and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Coles and Treasury Wine 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 Coles and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coles Group and Treasury Wine Estates, you can compare the effects of market volatilities on Coles and Treasury Wine 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 Coles with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coles and Treasury Wine.
Diversification Opportunities for Coles and Treasury Wine
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coles and Treasury is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Coles Group and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates and Coles 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 Coles Group are associated (or correlated) with Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Coles i.e., Coles and Treasury Wine go up and down completely randomly.
Pair Corralation between Coles and Treasury Wine
Assuming the 90 days trading horizon Coles Group is expected to generate 0.59 times more return on investment than Treasury Wine. However, Coles Group is 1.7 times less risky than Treasury Wine. It trades about 0.05 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.0 per unit of risk. If you would invest 1,527 in Coles Group on September 26, 2024 and sell it today you would earn a total of 353.00 from holding Coles Group or generate 23.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Coles Group vs. Treasury Wine Estates
Performance |
Timeline |
Coles Group |
Treasury Wine Estates |
Coles and Treasury Wine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coles and Treasury Wine
The main advantage of trading using opposite Coles and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coles position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.Coles vs. Accent Resources NL | Coles vs. Hutchison Telecommunications | Coles vs. Energy Resources | Coles vs. GO2 People |
Treasury Wine vs. PVW Resources | Treasury Wine vs. Woolworths | Treasury Wine vs. Wesfarmers | Treasury Wine vs. Coles Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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