Correlation Between Treasury Wine and Dana
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Dana 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 Dana 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 Dana Inc, you can compare the effects of market volatilities on Treasury Wine and Dana 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 Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Dana.
Diversification Opportunities for Treasury Wine and Dana
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Treasury and Dana is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc 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 Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of Treasury Wine i.e., Treasury Wine and Dana go up and down completely randomly.
Pair Corralation between Treasury Wine and Dana
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Dana. But the pink sheet apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.04 times less risky than Dana. The pink sheet trades about -0.31 of its potential returns per unit of risk. The Dana Inc is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,157 in Dana Inc on October 22, 2024 and sell it today you would earn a total of 135.00 from holding Dana Inc or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Treasury Wine Estates vs. Dana Inc
Performance |
| Timeline |
| Treasury Wine Estates |
| Dana Inc |
Treasury Wine and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Dana
The main advantage of trading using opposite Treasury Wine and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Dana 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 Dana will offset losses from the drop in Dana's long position.| Treasury Wine vs. Pernod Ricard SA | Treasury Wine vs. Willamette Valley Vineyards | Treasury Wine vs. MGP Ingredients | Treasury Wine vs. Constellation Brands Class |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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