Correlation Between Vintage Wine and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Vintage Wine and Treasury Wine 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 Vintage Wine and Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vintage Wine Estates and Treasury Wine Estates, you can compare the effects of market volatilities on Vintage Wine and Treasury Wine 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 Vintage Wine with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vintage Wine and Treasury Wine.
Diversification Opportunities for Vintage Wine and Treasury Wine
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vintage and Treasury is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vintage Wine Estates and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates and Vintage 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 Vintage Wine Estates are associated (or correlated) with Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Vintage Wine i.e., Vintage Wine and Treasury Wine go up and down completely randomly.
Pair Corralation between Vintage Wine and Treasury Wine
Considering the 90-day investment horizon Vintage Wine Estates is expected to under-perform the Treasury Wine. In addition to that, Vintage Wine is 10.78 times more volatile than Treasury Wine Estates. It trades about -0.05 of its total potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.0 per unit of volatility. If you would invest 766.00 in Treasury Wine Estates on August 30, 2024 and sell it today you would lose (11.00) from holding Treasury Wine Estates or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.06% |
| Values | Daily Returns |
Vintage Wine Estates vs. Treasury Wine Estates
Performance |
| Timeline |
| Vintage Wine Estates |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Treasury Wine Estates |
Vintage Wine and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vintage Wine and Treasury Wine
The main advantage of trading using opposite Vintage Wine and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vintage Wine position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.| Vintage Wine vs. MGP Ingredients | Vintage Wine vs. Brown Forman | Vintage Wine vs. Diageo PLC ADR | Vintage Wine vs. Brown Forman |
| Treasury Wine vs. Diageo PLC ADR | Treasury Wine vs. Pernod Ricard SA | Treasury Wine vs. Remy Cointreau SA | Treasury Wine vs. MGP Ingredients |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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