Correlation Between Latitude Financial and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Latitude Financial 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 Latitude Financial and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Latitude Financial Services and Treasury Wine Estates, you can compare the effects of market volatilities on Latitude Financial 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 Latitude Financial with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latitude Financial and Treasury Wine.
Diversification Opportunities for Latitude Financial and Treasury Wine
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Latitude and Treasury is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Latitude Financial Services 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 Latitude Financial 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 Latitude Financial Services 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 Latitude Financial i.e., Latitude Financial and Treasury Wine go up and down completely randomly.
Pair Corralation between Latitude Financial and Treasury Wine
Assuming the 90 days trading horizon Latitude Financial Services is expected to under-perform the Treasury Wine. But the stock apears to be less risky and, when comparing its historical volatility, Latitude Financial Services is 1.79 times less risky than Treasury Wine. The stock trades about -0.05 of its potential returns per unit of risk. The Treasury Wine Estates is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,112 in Treasury Wine Estates on September 2, 2024 and sell it today you would earn a total of 21.00 from holding Treasury Wine Estates or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Latitude Financial Services vs. Treasury Wine Estates
Performance |
| Timeline |
| Latitude Financial |
| Treasury Wine Estates |
Latitude Financial and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Latitude Financial and Treasury Wine
The main advantage of trading using opposite Latitude Financial and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latitude Financial 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.| Latitude Financial vs. Inventis | Latitude Financial vs. Pengana Private Equity | Latitude Financial vs. PM Capital Global | Latitude Financial vs. Macquarie Group Ltd |
| Treasury Wine vs. Charter Hall Retail | Treasury Wine vs. Truscott Mining Corp | Treasury Wine vs. Tombador Iron | Treasury Wine vs. Kingsrose Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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