Correlation Between Treasury Wine and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on Treasury Wine and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and GreenX Metals.
Diversification Opportunities for Treasury Wine and GreenX Metals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Treasury and GreenX is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Treasury Wine i.e., Treasury Wine and GreenX Metals go up and down completely randomly.
Pair Corralation between Treasury Wine and GreenX Metals
Assuming the 90 days trading horizon Treasury Wine Estates is expected to generate 0.59 times more return on investment than GreenX Metals. However, Treasury Wine Estates is 1.68 times less risky than GreenX Metals. It trades about -0.04 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.29 per unit of risk. If you would invest 1,175 in Treasury Wine Estates on August 30, 2024 and sell it today you would lose (20.00) from holding Treasury Wine Estates or give up 1.7% 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. GreenX Metals
Performance |
| Timeline |
| Treasury Wine Estates |
| GreenX Metals |
Treasury Wine and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and GreenX Metals
The main advantage of trading using opposite Treasury Wine and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Treasury Wine vs. PVW Resources | Treasury Wine vs. Woolworths | Treasury Wine vs. Wesfarmers | Treasury Wine vs. Coles Group |
| GreenX Metals vs. National Storage REIT | GreenX Metals vs. Red Hill Iron | GreenX Metals vs. Hawsons Iron | GreenX Metals vs. Seven West Media |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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