Correlation Between Globe Metals and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Globe Metals 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 Globe Metals and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Metals Mining and Treasury Wine Estates, you can compare the effects of market volatilities on Globe Metals 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 Globe Metals with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and Treasury Wine.
Diversification Opportunities for Globe Metals and Treasury Wine
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and Treasury is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining 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 Globe Metals 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 Globe Metals Mining 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 Globe Metals i.e., Globe Metals and Treasury Wine go up and down completely randomly.
Pair Corralation between Globe Metals and Treasury Wine
Assuming the 90 days trading horizon Globe Metals Mining is expected to under-perform the Treasury Wine. In addition to that, Globe Metals is 3.16 times more volatile than Treasury Wine Estates. It trades about -0.01 of its total potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.31 per unit of volatility. If you would invest 1,090 in Treasury Wine Estates on September 13, 2024 and sell it today you would earn a total of 95.00 from holding Treasury Wine Estates or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Globe Metals Mining vs. Treasury Wine Estates
Performance |
| Timeline |
| Globe Metals Mining |
| Treasury Wine Estates |
Globe Metals and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and Treasury Wine
The main advantage of trading using opposite Globe Metals and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals 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.| Globe Metals vs. Northern Star Resources | Globe Metals vs. Evolution Mining | Globe Metals vs. Bluescope Steel | Globe Metals vs. Sandfire Resources NL |
| Treasury Wine vs. Black Rock Mining | Treasury Wine vs. Hansen Technologies | Treasury Wine vs. Aurelia Metals | Treasury Wine vs. Mach7 Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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