Correlation Between Treasury Wine and Bendigo
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Bendigo 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 Bendigo 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 Bendigo and Adelaide, you can compare the effects of market volatilities on Treasury Wine and Bendigo 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 Bendigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Bendigo.
Diversification Opportunities for Treasury Wine and Bendigo
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Treasury and Bendigo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Bendigo and Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo and Adelaide 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 Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo and Adelaide has no effect on the direction of Treasury Wine i.e., Treasury Wine and Bendigo go up and down completely randomly.
Pair Corralation between Treasury Wine and Bendigo
Assuming the 90 days trading horizon Treasury Wine Estates is expected to under-perform the Bendigo. In addition to that, Treasury Wine is 6.29 times more volatile than Bendigo and Adelaide. It trades about -0.15 of its total potential returns per unit of risk. Bendigo and Adelaide is currently generating about -0.12 per unit of volatility. If you would invest 10,499 in Bendigo and Adelaide on November 3, 2024 and sell it today you would lose (54.00) from holding Bendigo and Adelaide or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Bendigo and Adelaide
Performance |
| Timeline |
| Treasury Wine Estates |
| Bendigo and Adelaide |
Treasury Wine and Bendigo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Bendigo
The main advantage of trading using opposite Treasury Wine and Bendigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Bendigo 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 Bendigo will offset losses from the drop in Bendigo's long position.| Treasury Wine vs. MetalsGrove Mining | Treasury Wine vs. DMC Mining | Treasury Wine vs. MotorCycle Holdings | Treasury Wine vs. Sayona Mining |
| Bendigo vs. Stelar Metals | Bendigo vs. Lykos Metals | Bendigo vs. MetalsGrove Mining | Bendigo vs. Dalaroo Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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