Correlation Between Treasury Wine and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies, you can compare the effects of market volatilities on Treasury Wine and Hansen Technologies 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 Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Hansen Technologies.
Diversification Opportunities for Treasury Wine and Hansen Technologies
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Treasury and Hansen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies 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 Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Treasury Wine i.e., Treasury Wine and Hansen Technologies go up and down completely randomly.
Pair Corralation between Treasury Wine and Hansen Technologies
Assuming the 90 days trading horizon Treasury Wine Estates is expected to generate 0.64 times more return on investment than Hansen Technologies. However, Treasury Wine Estates is 1.56 times less risky than Hansen Technologies. It trades about 0.31 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.01 per unit of risk. If you would invest 1,090 in Treasury Wine Estates on September 13, 2024 and sell it today you would earn a total of 95.00 from holding Treasury Wine Estates or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Hansen Technologies
Performance |
| Timeline |
| Treasury Wine Estates |
| Hansen Technologies |
Treasury Wine and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Hansen Technologies
The main advantage of trading using opposite Treasury Wine and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.| Treasury Wine vs. Black Rock Mining | Treasury Wine vs. Hansen Technologies | Treasury Wine vs. Aurelia Metals | Treasury Wine vs. Mach7 Technologies |
| Hansen Technologies vs. Pioneer Credit | Hansen Technologies vs. BSP Financial Group | Hansen Technologies vs. Insignia Financial | Hansen Technologies vs. Retail Food Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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