Correlation Between Tsingtao Brewery and Jinlong Machinery
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By analyzing existing cross correlation between Tsingtao Brewery Co and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Tsingtao Brewery and Jinlong Machinery 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 Tsingtao Brewery with a short position of Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Jinlong Machinery.
Diversification Opportunities for Tsingtao Brewery and Jinlong Machinery
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and Jinlong is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery and Tsingtao Brewery 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 Tsingtao Brewery Co are associated (or correlated) with Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Jinlong Machinery
Assuming the 90 days trading horizon Tsingtao Brewery Co is expected to generate 0.47 times more return on investment than Jinlong Machinery. However, Tsingtao Brewery Co is 2.12 times less risky than Jinlong Machinery. It trades about 0.08 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about -0.3 per unit of risk. If you would invest 7,420 in Tsingtao Brewery Co on October 11, 2024 and sell it today you would earn a total of 220.00 from holding Tsingtao Brewery Co or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| Tsingtao Brewery |
| Jinlong Machinery |
Tsingtao Brewery and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Jinlong Machinery
The main advantage of trading using opposite Tsingtao Brewery and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.The idea behind Tsingtao Brewery Co and Jinlong Machinery Electronic 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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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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