Correlation Between Treasury Wine and Graham Holdings

Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Graham Holdings 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 Graham Holdings 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 Graham Holdings Co, you can compare the effects of market volatilities on Treasury Wine and Graham Holdings 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 Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Graham Holdings.

Diversification Opportunities for Treasury Wine and Graham Holdings

-0.61

Correlation Coefficient

Treasury Wine  Graham Holdings

Excellent diversification

The 3 months correlation between Treasury and Graham is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings 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 Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Treasury Wine i.e., Treasury Wine and Graham Holdings go up and down completely randomly.

Pair Corralation between Treasury Wine and Graham Holdings

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Graham Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.03 times less risky than Graham Holdings. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Graham Holdings Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  72,899  in Graham Holdings Co on October 10, 2024 and sell it today you would earn a total of  13,232  from holding Graham Holdings Co or generate 18.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Treasury Wine Estates  vs.  Graham Holdings Co

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 weak 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.

Graham Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Graham Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Treasury Wine and Graham Holdings

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

The idea behind Treasury Wine Estates and Graham Holdings Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.