Correlation Between Treasury Wine and GB Group
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and GB Group 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 Treasury Wine and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Wine Estates and GB Group plc, you can compare the effects of market volatilities on Treasury Wine and GB Group 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 Treasury Wine with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and GB Group.
Diversification Opportunities for Treasury Wine and GB Group
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Treasury and 0GB is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and Treasury Wine 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 Treasury Wine Estates are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Treasury Wine i.e., Treasury Wine and GB Group go up and down completely randomly.
Pair Corralation between Treasury Wine and GB Group
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the GB Group. But the stock apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.18 times less risky than GB Group. The stock trades about -0.26 of its potential returns per unit of risk. The GB Group plc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 410.00 in GB Group plc on October 26, 2024 and sell it today you would lose (4.00) from holding GB Group plc or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Treasury Wine Estates vs. GB Group plc
Performance |
| Timeline |
| Treasury Wine Estates |
| GB Group plc |
Treasury Wine and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and GB Group
The main advantage of trading using opposite Treasury Wine and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.| Treasury Wine vs. Tianjin Capital Environmental | Treasury Wine vs. BlueScope Steel Limited | Treasury Wine vs. Grupo Carso SAB | Treasury Wine vs. Olympic Steel |
| GB Group vs. Align Technology | GB Group vs. Treasury Wine Estates | GB Group vs. American Eagle Outfitters | GB Group vs. Micron Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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