Correlation Between Tsingtao Brewery and Kangping Technology
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By analyzing existing cross correlation between Tsingtao Brewery Co and Kangping Technology Co, you can compare the effects of market volatilities on Tsingtao Brewery and Kangping Technology 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 Kangping Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Kangping Technology.
Diversification Opportunities for Tsingtao Brewery and Kangping Technology
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and Kangping is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Kangping Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangping Technology 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 Kangping Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangping Technology has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Kangping Technology go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Kangping Technology
Assuming the 90 days trading horizon Tsingtao Brewery Co is expected to under-perform the Kangping Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery Co is 1.24 times less risky than Kangping Technology. The stock trades about -0.4 of its potential returns per unit of risk. The Kangping Technology Co is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,958 in Kangping Technology Co on November 7, 2024 and sell it today you would earn a total of 232.00 from holding Kangping Technology Co or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Kangping Technology Co
Performance |
| Timeline |
| Tsingtao Brewery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kangping Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tsingtao Brewery and Kangping Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Kangping Technology
The main advantage of trading using opposite Tsingtao Brewery and Kangping Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Kangping Technology 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 Kangping Technology will offset losses from the drop in Kangping Technology's long position.The idea behind Tsingtao Brewery Co and Kangping Technology Co 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.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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