Correlation Between Treasury Wine and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Bluescope Steel 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 Bluescope Steel 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 Bluescope Steel, you can compare the effects of market volatilities on Treasury Wine and Bluescope Steel 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 Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Bluescope Steel.
Diversification Opportunities for Treasury Wine and Bluescope Steel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Treasury and Bluescope is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel 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 Bluescope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluescope Steel has no effect on the direction of Treasury Wine i.e., Treasury Wine and Bluescope Steel go up and down completely randomly.
Pair Corralation between Treasury Wine and Bluescope Steel
Assuming the 90 days trading horizon Treasury Wine Estates is expected to generate 0.96 times more return on investment than Bluescope Steel. However, Treasury Wine Estates is 1.05 times less risky than Bluescope Steel. It trades about 0.03 of its potential returns per unit of risk. Bluescope Steel is currently generating about 0.03 per unit of risk. If you would invest 1,031 in Treasury Wine Estates on August 25, 2024 and sell it today you would earn a total of 97.00 from holding Treasury Wine Estates or generate 9.41% 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. Bluescope Steel
Performance |
| Timeline |
| Treasury Wine Estates |
| Bluescope Steel |
Treasury Wine and Bluescope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Bluescope Steel
The main advantage of trading using opposite Treasury Wine and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Bluescope Steel 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 Bluescope Steel will offset losses from the drop in Bluescope Steel's long position.| Treasury Wine vs. Zoom2u Technologies | Treasury Wine vs. Retail Food Group | Treasury Wine vs. Ainsworth Game Technology | Treasury Wine vs. Australian Unity Office |
| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Sandfire Resources NL | Bluescope Steel vs. Aneka Tambang Tbk |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |