Correlation Between Treasury Wine and Viking Holdings

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

Diversification Opportunities for Treasury Wine and Viking Holdings

-0.63

Correlation Coefficient

Treasury Wine  Viking Holdings

Excellent diversification

The 3 months correlation between Treasury and Viking is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking 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 Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of Treasury Wine i.e., Treasury Wine and Viking Holdings go up and down completely randomly.

Pair Corralation between Treasury Wine and Viking Holdings

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Viking Holdings. In addition to that, Treasury Wine is 1.14 times more volatile than Viking Holdings. It trades about -0.13 of its total potential returns per unit of risk. Viking Holdings is currently generating about 0.19 per unit of volatility. If you would invest  3,851  in Viking Holdings on October 23, 2024 and sell it today you would earn a total of  920.00  from holding Viking Holdings or generate 23.89% return on investment over 90 days.

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

Treasury Wine Estates  vs.  Viking Holdings

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 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.

Viking Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viking Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward indicators, Viking Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Treasury Wine and Viking Holdings

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

The idea behind Treasury Wine Estates and Viking Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.