Correlation Between Treasury Wine and National Health
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and National Health 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 National Health 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 National Health Investors, you can compare the effects of market volatilities on Treasury Wine and National Health 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and National Health.
Diversification Opportunities for Treasury Wine and National Health
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Treasury and National is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Treasury Wine i.e., Treasury Wine and National Health go up and down completely randomly.
Pair Corralation between Treasury Wine and National Health
Assuming the 90 days horizon Treasury Wine is expected to generate 2.4 times less return on investment than National Health. In addition to that, Treasury Wine is 1.12 times more volatile than National Health Investors. It trades about 0.04 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.11 per unit of volatility. If you would invest 4,800 in National Health Investors on September 4, 2024 and sell it today you would earn a total of 2,450 from holding National Health Investors or generate 51.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. National Health Investors
Performance |
| Timeline |
| Treasury Wine Estates |
| National Health Investors |
Treasury Wine and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and National Health
The main advantage of trading using opposite Treasury Wine and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| Treasury Wine vs. Tsingtao Brewery | Treasury Wine vs. BLUESCOPE STEEL | Treasury Wine vs. Fevertree Drinks PLC | Treasury Wine vs. EHEALTH |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |