Correlation Between OCBCSP and Treasury Wine

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

By analyzing existing cross correlation between OCBCSP 1832 10 SEP 30 and Treasury Wine Estates, you can compare the effects of market volatilities on OCBCSP 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 OCBCSP with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCBCSP and Treasury Wine.

Diversification Opportunities for OCBCSP and Treasury Wine

-0.49

Correlation Coefficient

OCBCSP  Treasury Wine

Very good diversification

The 3 months correlation between OCBCSP and Treasury is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding OCBCSP 1832 10 SEP 30 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 OCBCSP 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 OCBCSP 1832 10 SEP 30 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 OCBCSP i.e., OCBCSP and Treasury Wine go up and down completely randomly.

Pair Corralation between OCBCSP and Treasury Wine

Assuming the 90 days trading horizon OCBCSP 1832 10 SEP 30 is expected to under-perform the Treasury Wine. But the bond apears to be less risky and, when comparing its historical volatility, OCBCSP 1832 10 SEP 30 is 3.34 times less risky than Treasury Wine. The bond trades about -0.02 of its potential returns per unit of risk. The Treasury Wine Estates is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  677.00  in Treasury Wine Estates on October 4, 2024 and sell it today you would earn a total of  13.00  from holding Treasury Wine Estates or generate 1.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	25.97%
Values	Daily Returns

OCBCSP 1832 10 SEP 30  vs.  Treasury Wine Estates

OCBCSP 1832 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCBCSP 1832 10 SEP 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for OCBCSP 1832 10 SEP 30 investors.

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.

Pair Trading with OCBCSP and Treasury Wine

The main advantage of trading using opposite OCBCSP and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OCBCSP 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 OCBCSP 1832 10 SEP 30 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.