Correlation Between Hansen Technologies and Treasury Wine

Can any of the company-specific risk be diversified away by investing in both Hansen Technologies 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 Hansen Technologies and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hansen Technologies and Treasury Wine Estates, you can compare the effects of market volatilities on Hansen Technologies 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 Hansen Technologies with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and Treasury Wine.

Diversification Opportunities for Hansen Technologies and Treasury Wine

-0.08

Correlation Coefficient

Hansen Technologies  Treasury Wine

Good diversification

The 3 months correlation between Hansen and Treasury is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies i.e., Hansen Technologies and Treasury Wine go up and down completely randomly.

Pair Corralation between Hansen Technologies and Treasury Wine

Assuming the 90 days trading horizon Hansen Technologies is expected to generate 0.98 times more return on investment than Treasury Wine. However, Hansen Technologies is 1.02 times less risky than Treasury Wine. It trades about 0.21 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.06 per unit of risk. If you would invest  435.00  in Hansen Technologies on September 13, 2024 and sell it today you would earn a total of  110.00  from holding Hansen Technologies or generate 25.29% return on investment over 90 days.

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

Hansen Technologies  vs.  Treasury Wine Estates

Hansen Technologies

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Treasury Wine Estates

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Treasury Wine Estates are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Treasury Wine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hansen Technologies and Treasury Wine

The main advantage of trading using opposite Hansen Technologies and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies 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.

The idea behind Hansen Technologies and Treasury Wine Estates 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.