Correlation Between Wam Capital and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Wam Capital 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 Wam Capital and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wam Capital and Treasury Wine Estates, you can compare the effects of market volatilities on Wam Capital 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 Wam Capital with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wam Capital and Treasury Wine.
Diversification Opportunities for Wam Capital and Treasury Wine
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wam and Treasury is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wam Capital 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 Wam Capital 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 Wam Capital 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 Wam Capital i.e., Wam Capital and Treasury Wine go up and down completely randomly.
Pair Corralation between Wam Capital and Treasury Wine
Assuming the 90 days trading horizon Wam Capital is expected to generate 0.53 times more return on investment than Treasury Wine. However, Wam Capital is 1.88 times less risky than Treasury Wine. It trades about 0.18 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.03 per unit of risk. If you would invest 152.00 in Wam Capital on December 1, 2024 and sell it today you would earn a total of 13.00 from holding Wam Capital or generate 8.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wam Capital vs. Treasury Wine Estates
Performance |
Timeline |
Wam Capital |
Treasury Wine Estates |
Wam Capital and Treasury Wine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wam Capital and Treasury Wine
The main advantage of trading using opposite Wam Capital and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wam Capital 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.Wam Capital vs. Super Retail Group | Wam Capital vs. Australian Unity Office | Wam Capital vs. Advanced Braking Technology | Wam Capital vs. EVE Health Group |
Treasury Wine vs. Autosports Group | Treasury Wine vs. Sky Metals | Treasury Wine vs. Seven West Media | Treasury Wine vs. Falcon Metals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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