Correlation Between Treasury Wine and HEMISPHERE EGY

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

Diversification Opportunities for Treasury Wine and HEMISPHERE EGY

-0.8

Correlation Coefficient

Treasury Wine  HEMISPHERE EGY

Pay attention - limited upside

The 3 months correlation between Treasury and HEMISPHERE is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY 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 HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of Treasury Wine i.e., Treasury Wine and HEMISPHERE EGY go up and down completely randomly.

Pair Corralation between Treasury Wine and HEMISPHERE EGY

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the HEMISPHERE EGY. In addition to that, Treasury Wine is 1.52 times more volatile than HEMISPHERE EGY. It trades about -0.06 of its total potential returns per unit of risk. HEMISPHERE EGY is currently generating about 0.16 per unit of volatility. If you would invest  109.00  in HEMISPHERE EGY on April 24, 2025 and sell it today you would earn a total of  11.00  from holding HEMISPHERE EGY or generate 10.09% 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.  HEMISPHERE EGY

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.

HEMISPHERE EGY

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HEMISPHERE EGY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, HEMISPHERE EGY may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Treasury Wine and HEMISPHERE EGY

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

The idea behind Treasury Wine Estates and HEMISPHERE EGY 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.