Correlation Between Treasury Wine and Avance Gas
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Avance Gas 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 Avance Gas 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 Avance Gas Holding, you can compare the effects of market volatilities on Treasury Wine and Avance Gas 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 Avance Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Avance Gas.
Diversification Opportunities for Treasury Wine and Avance Gas
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Treasury and Avance is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding 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 Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of Treasury Wine i.e., Treasury Wine and Avance Gas go up and down completely randomly.
Pair Corralation between Treasury Wine and Avance Gas
Assuming the 90 days horizon Treasury Wine is expected to generate 3.69 times less return on investment than Avance Gas. But when comparing it to its historical volatility, Treasury Wine Estates is 1.61 times less risky than Avance Gas. It trades about 0.11 of its potential returns per unit of risk. Avance Gas Holding is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 849.00 in Avance Gas Holding on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Avance Gas Holding or generate 15.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Avance Gas Holding
Performance |
| Timeline |
| Treasury Wine Estates |
| Avance Gas Holding |
Treasury Wine and Avance Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Avance Gas
The main advantage of trading using opposite Treasury Wine and Avance Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Avance Gas 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 Avance Gas will offset losses from the drop in Avance Gas' long position.The idea behind Treasury Wine Estates and Avance Gas Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Avance Gas vs. Treasury Wine Estates | Avance Gas vs. Coeur Mining | Avance Gas vs. VIVA WINE GROUP | Avance Gas vs. MCEWEN MINING INC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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