Correlation Between Treasury Wine and CSSC Offshore

Can any of the company-specific risk be diversified away by investing in both Treasury Wine and CSSC Offshore 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 CSSC Offshore 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 CSSC Offshore Marine, you can compare the effects of market volatilities on Treasury Wine and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and CSSC Offshore.

Diversification Opportunities for Treasury Wine and CSSC Offshore

-0.81

Correlation Coefficient

Treasury Wine  CSSC Offshore

Pay attention - limited upside

The 3 months correlation between Treasury and CSSC is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Treasury Wine i.e., Treasury Wine and CSSC Offshore go up and down completely randomly.

Pair Corralation between Treasury Wine and CSSC Offshore

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the CSSC Offshore. In addition to that, Treasury Wine is 14.24 times more volatile than CSSC Offshore Marine. It trades about -0.07 of its total potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.13 per unit of volatility. If you would invest  121.00  in CSSC Offshore Marine on April 20, 2025 and sell it today you would earn a total of  1.00  from holding CSSC Offshore Marine or generate 0.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Treasury Wine Estates  vs.  CSSC Offshore Marine

Treasury Wine Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Treasury Wine is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CSSC Offshore Marine

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSSC Offshore Marine are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CSSC Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Treasury Wine and CSSC Offshore

The main advantage of trading using opposite Treasury Wine and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.

The idea behind Treasury Wine Estates and CSSC Offshore Marine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.