Correlation Between Treasury Wine and Lenovo Group
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Lenovo 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 Lenovo 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 Lenovo Group Limited, you can compare the effects of market volatilities on Treasury Wine and Lenovo 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 Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Lenovo Group.
Diversification Opportunities for Treasury Wine and Lenovo Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Treasury and Lenovo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited 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 Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of Treasury Wine i.e., Treasury Wine and Lenovo Group go up and down completely randomly.
Pair Corralation between Treasury Wine and Lenovo Group
Assuming the 90 days horizon Treasury Wine is expected to generate 28.3 times less return on investment than Lenovo Group. But when comparing it to its historical volatility, Treasury Wine Estates is 1.6 times less risky than Lenovo Group. It trades about 0.0 of its potential returns per unit of risk. Lenovo Group Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,422 in Lenovo Group Limited on September 14, 2024 and sell it today you would earn a total of 818.00 from holding Lenovo Group Limited or generate 57.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Lenovo Group Limited
Performance |
| Timeline |
| Treasury Wine Estates |
| Lenovo Group Limited |
Treasury Wine and Lenovo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Lenovo Group
The main advantage of trading using opposite Treasury Wine and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Lenovo 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 Lenovo Group will offset losses from the drop in Lenovo Group's long position.| Treasury Wine vs. Diageo plc | Treasury Wine vs. Thai Beverage Public | Treasury Wine vs. Rmy Cointreau SA |
| Lenovo Group vs. United Airlines Holdings | Lenovo Group vs. CHINA TONTINE WINES | Lenovo Group vs. ITALIAN WINE BRANDS | Lenovo Group vs. Treasury Wine Estates |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |