Correlation Between Daito Trust and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Daito Trust and Tsingtao Brewery 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 Daito Trust and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daito Trust Construction and Tsingtao Brewery, you can compare the effects of market volatilities on Daito Trust and Tsingtao Brewery 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 Daito Trust with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daito Trust and Tsingtao Brewery.
Diversification Opportunities for Daito Trust and Tsingtao Brewery
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daito and Tsingtao is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Daito Trust Construction and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Daito Trust 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 Daito Trust Construction are associated (or correlated) with Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of Daito Trust i.e., Daito Trust and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Daito Trust and Tsingtao Brewery
Assuming the 90 days horizon Daito Trust is expected to generate 5.31 times less return on investment than Tsingtao Brewery. But when comparing it to its historical volatility, Daito Trust Construction is 2.44 times less risky than Tsingtao Brewery. It trades about 0.01 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 488.00 in Tsingtao Brewery on August 30, 2024 and sell it today you would earn a total of 109.00 from holding Tsingtao Brewery or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daito Trust Construction vs. Tsingtao Brewery
Performance |
| Timeline |
| Daito Trust Construction |
| Tsingtao Brewery |
Daito Trust and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daito Trust and Tsingtao Brewery
The main advantage of trading using opposite Daito Trust and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daito Trust position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| Daito Trust vs. CVR Medical Corp | Daito Trust vs. CeoTronics AG | Daito Trust vs. CompuGroup Medical SE | Daito Trust vs. Lendlease Group |
| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Superior Plus Corp | Tsingtao Brewery vs. SIVERS SEMICONDUCTORS AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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