Correlation Between Treasury Wine and 019736AG2

Can any of the company-specific risk be diversified away by investing in both Treasury Wine and 019736AG2 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 019736AG2 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 US019736AG29, you can compare the effects of market volatilities on Treasury Wine and 019736AG2 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 019736AG2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and 019736AG2.

Diversification Opportunities for Treasury Wine and 019736AG2

0.17

Correlation Coefficient

Treasury Wine  019736AG2

Average diversification

The 3 months correlation between Treasury and 019736AG2 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and US019736AG29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US019736AG29 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 019736AG2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US019736AG29 has no effect on the direction of Treasury Wine i.e., Treasury Wine and 019736AG2 go up and down completely randomly.

Pair Corralation between Treasury Wine and 019736AG2

Assuming the 90 days horizon Treasury Wine Estates is expected to generate 1.2 times more return on investment than 019736AG2. However, Treasury Wine is 1.2 times more volatile than US019736AG29. It trades about -0.15 of its potential returns per unit of risk. US019736AG29 is currently generating about -0.38 per unit of risk. If you would invest  714.00  in Treasury Wine Estates on October 10, 2024 and sell it today you would lose (24.00) from holding Treasury Wine Estates or give up 3.36% of portfolio value over 90 days.

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

Treasury Wine Estates  vs.  US019736AG29

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.

US019736AG29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US019736AG29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US019736AG29 investors.

Pair Trading with Treasury Wine and 019736AG2

The main advantage of trading using opposite Treasury Wine and 019736AG2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, 019736AG2 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 019736AG2 will offset losses from the drop in 019736AG2's long position.

The idea behind Treasury Wine Estates and US019736AG29 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.