Correlation Between Treasury Wine and PULSION Medical

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

Diversification Opportunities for Treasury Wine and PULSION Medical

-0.77

Correlation Coefficient

Treasury Wine  PULSION Medical

Pay attention - limited upside

The 3 months correlation between Treasury and PULSION is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and PULSION Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PULSION Medical Systems 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 PULSION Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PULSION Medical Systems has no effect on the direction of Treasury Wine i.e., Treasury Wine and PULSION Medical go up and down completely randomly.

Pair Corralation between Treasury Wine and PULSION Medical

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the PULSION Medical. But the stock apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 2.74 times less risky than PULSION Medical. The stock trades about -0.06 of its potential returns per unit of risk. The PULSION Medical Systems is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,559  in PULSION Medical Systems on April 22, 2025 and sell it today you would earn a total of  441.00  from holding PULSION Medical Systems or generate 28.29% return on investment over 90 days.

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

Treasury Wine Estates  vs.  PULSION Medical Systems

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

PULSION Medical Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PULSION Medical Systems are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PULSION Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Treasury Wine and PULSION Medical

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

The idea behind Treasury Wine Estates and PULSION Medical Systems 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.