Correlation Between Treasury Wine and Ampol
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Ampol 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 Ampol 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 Ampol, you can compare the effects of market volatilities on Treasury Wine and Ampol 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 Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Ampol.
Diversification Opportunities for Treasury Wine and Ampol
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Treasury and Ampol is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Ampol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol 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 Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol has no effect on the direction of Treasury Wine i.e., Treasury Wine and Ampol go up and down completely randomly.
Pair Corralation between Treasury Wine and Ampol
Assuming the 90 days trading horizon Treasury Wine Estates is expected to generate 1.24 times more return on investment than Ampol. However, Treasury Wine is 1.24 times more volatile than Ampol. It trades about 0.05 of its potential returns per unit of risk. Ampol is currently generating about -0.03 per unit of risk. If you would invest 1,145 in Treasury Wine Estates on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Treasury Wine Estates or generate 4.37% 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. Ampol
Performance |
| Timeline |
| Treasury Wine Estates |
| Ampol |
Treasury Wine and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Ampol
The main advantage of trading using opposite Treasury Wine and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Treasury Wine vs. Tlou Energy | Treasury Wine vs. Southern Cross Gold | Treasury Wine vs. Minbos Resources | Treasury Wine vs. Elevate Uranium |
| Ampol vs. Duxton Broadacre Farms | Ampol vs. Ironbark Capital | Ampol vs. Sandon Capital Investments | Ampol vs. Mirrabooka Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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