Correlation Between Treasury Wine and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and LithiumBank Resources 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 LithiumBank Resources 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 LithiumBank Resources Corp, you can compare the effects of market volatilities on Treasury Wine and LithiumBank Resources 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 LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and LithiumBank Resources.
Diversification Opportunities for Treasury Wine and LithiumBank Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Treasury and LithiumBank is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources 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 LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of Treasury Wine i.e., Treasury Wine and LithiumBank Resources go up and down completely randomly.
Pair Corralation between Treasury Wine and LithiumBank Resources
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the LithiumBank Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.25 times less risky than LithiumBank Resources. The pink sheet trades about -0.09 of its potential returns per unit of risk. The LithiumBank Resources Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 21.00 in LithiumBank Resources Corp on September 13, 2024 and sell it today you would lose (1.00) from holding LithiumBank Resources Corp or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. LithiumBank Resources Corp
Performance |
| Timeline |
| Treasury Wine Estates |
| LithiumBank Resources |
Treasury Wine and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and LithiumBank Resources
The main advantage of trading using opposite Treasury Wine and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, LithiumBank Resources 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' long position.| Treasury Wine vs. Pernod Ricard SA | Treasury Wine vs. Willamette Valley Vineyards | Treasury Wine vs. MGP Ingredients | Treasury Wine vs. Duckhorn Portfolio |
| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Focus Graphite | LithiumBank Resources vs. Mineral Res |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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