Correlation Between Treasury Wine and Strix Group

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

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

Diversification Opportunities for Treasury Wine and Strix Group

0.37

Correlation Coefficient

Treasury Wine  Strix Group

Weak diversification

The 3 months correlation between Treasury and Strix is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc and Treasury Wine 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 Treasury Wine Estates are associated (or correlated) with Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of Treasury Wine i.e., Treasury Wine and Strix Group go up and down completely randomly.

Pair Corralation between Treasury Wine and Strix Group

Assuming the 90 days horizon Treasury Wine Estates is expected to generate 0.55 times more return on investment than Strix Group. However, Treasury Wine Estates is 1.8 times less risky than Strix Group. It trades about 0.0 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.21 per unit of risk. If you would invest  680.00  in Treasury Wine Estates on October 6, 2024 and sell it today you would lose (4.00) from holding Treasury Wine Estates or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Treasury Wine Estates  vs.  Strix Group Plc

Treasury Wine Estates

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Strix Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strix Group Plc 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 nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Treasury Wine and Strix Group

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

The idea behind Treasury Wine Estates and Strix Group Plc 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.