Correlation Between Treasury Wine and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and FAST RETAIL 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 FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on Treasury Wine and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and FAST RETAIL.
Diversification Opportunities for Treasury Wine and FAST RETAIL
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Treasury and FAST is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Treasury Wine i.e., Treasury Wine and FAST RETAIL go up and down completely randomly.
Pair Corralation between Treasury Wine and FAST RETAIL
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the FAST RETAIL. But the stock apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.06 times less risky than FAST RETAIL. The stock trades about 0.0 of its potential returns per unit of risk. The FAST RETAIL ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,863 in FAST RETAIL ADR on August 29, 2024 and sell it today you would earn a total of 1,097 from holding FAST RETAIL ADR or generate 58.88% 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. FAST RETAIL ADR
Performance |
| Timeline |
| Treasury Wine Estates |
| FAST RETAIL ADR |
Treasury Wine and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and FAST RETAIL
The main advantage of trading using opposite Treasury Wine and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Treasury Wine vs. Thai Beverage Public | Treasury Wine vs. Superior Plus Corp | Treasury Wine vs. Origin Agritech | Treasury Wine vs. Identiv |
| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings | FAST RETAIL vs. Origin Agritech |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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