Correlation Between Eastside Distilling and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Eastside Distilling 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 Eastside Distilling and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastside Distilling and Treasury Wine Estates, you can compare the effects of market volatilities on Eastside Distilling 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 Eastside Distilling with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and Treasury Wine.
Diversification Opportunities for Eastside Distilling and Treasury Wine
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastside and Treasury is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling 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 Eastside Distilling 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 Eastside Distilling 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 Eastside Distilling i.e., Eastside Distilling and Treasury Wine go up and down completely randomly.
Pair Corralation between Eastside Distilling and Treasury Wine
Given the investment horizon of 90 days Eastside Distilling is expected to generate 3.12 times more return on investment than Treasury Wine. However, Eastside Distilling is 3.12 times more volatile than Treasury Wine Estates. It trades about -0.06 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.23 per unit of risk. If you would invest 61.00 in Eastside Distilling on August 24, 2024 and sell it today you would lose (6.00) from holding Eastside Distilling or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastside Distilling vs. Treasury Wine Estates
Performance |
| Timeline |
| Eastside Distilling |
| Treasury Wine Estates |
Eastside Distilling and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastside Distilling and Treasury Wine
The main advantage of trading using opposite Eastside Distilling and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastside Distilling 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.| Eastside Distilling vs. Iconic Brands | Eastside Distilling vs. Andrew Peller Limited | Eastside Distilling vs. Splash Beverage Group | Eastside Distilling vs. Fresh Grapes LLC |
| Treasury Wine vs. Diageo PLC ADR | Treasury Wine vs. Pernod Ricard SA | Treasury Wine vs. Remy Cointreau SA | Treasury Wine vs. MGP Ingredients |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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