Correlation Between Treasury Wine and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics, you can compare the effects of market volatilities on Treasury Wine and Benchmark Electronics 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Benchmark Electronics.
Diversification Opportunities for Treasury Wine and Benchmark Electronics
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Treasury and Benchmark is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of Treasury Wine i.e., Treasury Wine and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Treasury Wine and Benchmark Electronics
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Benchmark Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.79 times less risky than Benchmark Electronics. The stock trades about -0.39 of its potential returns per unit of risk. The Benchmark Electronics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,463 in Benchmark Electronics on October 12, 2024 and sell it today you would lose (23.00) from holding Benchmark Electronics or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Benchmark Electronics
Performance |
| Timeline |
| Treasury Wine Estates |
| Benchmark Electronics |
Treasury Wine and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Benchmark Electronics
The main advantage of trading using opposite Treasury Wine and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| Treasury Wine vs. VULCAN MATERIALS | Treasury Wine vs. CITY OFFICE REIT | Treasury Wine vs. THRACE PLASTICS | Treasury Wine vs. Focus Home Interactive |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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