Correlation Between Treasury Wine and Australian Dollar
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Australian Dollar 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 Australian Dollar 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 Australian Dollar Currency, you can compare the effects of market volatilities on Treasury Wine and Australian Dollar 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 Australian Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Australian Dollar.
Diversification Opportunities for Treasury Wine and Australian Dollar
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Treasury and Australian is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Australian Dollar Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Dollar 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 Australian Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Dollar has no effect on the direction of Treasury Wine i.e., Treasury Wine and Australian Dollar go up and down completely randomly.
Pair Corralation between Treasury Wine and Australian Dollar
Assuming the 90 days trading horizon Treasury Wine Estates is expected to under-perform the Australian Dollar. In addition to that, Treasury Wine is 4.16 times more volatile than Australian Dollar Currency. It trades about -0.05 of its total potential returns per unit of risk. Australian Dollar Currency is currently generating about -0.2 per unit of volatility. If you would invest 6,240 in Australian Dollar Currency on September 13, 2024 and sell it today you would lose (190.00) from holding Australian Dollar Currency or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Australian Dollar Currency
Performance |
| Timeline |
Treasury Wine and Australian Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Treasury Wine Estates
Pair trading matchups for Treasury Wine
Australian Dollar Currency
Pair trading matchups for Australian Dollar
Pair Trading with Treasury Wine and Australian Dollar
The main advantage of trading using opposite Treasury Wine and Australian Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Australian Dollar 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 Australian Dollar will offset losses from the drop in Australian Dollar's long position.| Treasury Wine vs. Black Rock Mining | Treasury Wine vs. Hansen Technologies | Treasury Wine vs. Aurelia Metals | Treasury Wine vs. Mach7 Technologies |
| Australian Dollar vs. Black Rock Mining | Australian Dollar vs. Perseus Mining | Australian Dollar vs. Treasury Wine Estates | Australian Dollar vs. Platinum Asset Management |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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