Correlation Between Platinum Asset and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Platinum Asset 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 Platinum Asset and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asset Management and Treasury Wine Estates, you can compare the effects of market volatilities on Platinum Asset 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 Platinum Asset with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Treasury Wine.
Diversification Opportunities for Platinum Asset and Treasury Wine
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and Treasury is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management 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 Platinum Asset 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 Platinum Asset Management 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 Platinum Asset i.e., Platinum Asset and Treasury Wine go up and down completely randomly.
Pair Corralation between Platinum Asset and Treasury Wine
Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Treasury Wine. In addition to that, Platinum Asset is 1.59 times more volatile than Treasury Wine Estates. It trades about -0.02 of its total potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.0 per unit of volatility. If you would invest 1,233 in Treasury Wine Estates on August 28, 2024 and sell it today you would lose (103.00) from holding Treasury Wine Estates or give up 8.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Treasury Wine Estates
Performance |
| Timeline |
| Platinum Asset Management |
| Treasury Wine Estates |
Platinum Asset and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Treasury Wine
The main advantage of trading using opposite Platinum Asset and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset 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.| Platinum Asset vs. National Australia Bank | Platinum Asset vs. National Australia Bank | Platinum Asset vs. Westpac Banking | Platinum Asset vs. National Australia Bank |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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