Correlation Between Treasury Wine and Star Entertainment
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Star Entertainment 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 Star Entertainment 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 Star Entertainment Group, you can compare the effects of market volatilities on Treasury Wine and Star Entertainment 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 Star Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Star Entertainment.
Diversification Opportunities for Treasury Wine and Star Entertainment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Treasury and Star is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Star Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Entertainment 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 Star Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Entertainment has no effect on the direction of Treasury Wine i.e., Treasury Wine and Star Entertainment go up and down completely randomly.
Pair Corralation between Treasury Wine and Star Entertainment
Assuming the 90 days trading horizon Treasury Wine Estates is expected to generate 0.27 times more return on investment than Star Entertainment. However, Treasury Wine Estates is 3.72 times less risky than Star Entertainment. It trades about 0.01 of its potential returns per unit of risk. Star Entertainment Group is currently generating about -0.07 per unit of risk. If you would invest 1,038 in Treasury Wine Estates on October 26, 2024 and sell it today you would earn a total of 9.00 from holding Treasury Wine Estates or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Star Entertainment Group
Performance |
| Timeline |
| Treasury Wine Estates |
| Star Entertainment |
Treasury Wine and Star Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Star Entertainment
The main advantage of trading using opposite Treasury Wine and Star Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Star Entertainment 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 Star Entertainment will offset losses from the drop in Star Entertainment's long position.| Treasury Wine vs. Evolution Mining | Treasury Wine vs. Event Hospitality and | Treasury Wine vs. Globe Metals Mining | Treasury Wine vs. Sports Entertainment Group |
| Star Entertainment vs. Sayona Mining | Star Entertainment vs. Treasury Wine Estates | Star Entertainment vs. COAST ENTERTAINMENT HOLDINGS | Star Entertainment vs. Maggie Beer Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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