Correlation Between Tsingtao Brewery and Guangxi Wuzhou
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By analyzing existing cross correlation between Tsingtao Brewery Co and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Tsingtao Brewery and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Guangxi Wuzhou.
Diversification Opportunities for Tsingtao Brewery and Guangxi Wuzhou
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tsingtao and Guangxi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Guangxi Wuzhou
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.38 times less return on investment than Guangxi Wuzhou. But when comparing it to its historical volatility, Tsingtao Brewery Co is 1.14 times less risky than Guangxi Wuzhou. It trades about 0.08 of its potential returns per unit of risk. Guangxi Wuzhou Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Guangxi Wuzhou Communications on November 2, 2024 and sell it today you would earn a total of 98.00 from holding Guangxi Wuzhou Communications or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Guangxi Wuzhou Communications
Performance |
| Timeline |
| Tsingtao Brewery |
| Guangxi Wuzhou Commu |
Tsingtao Brewery and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Guangxi Wuzhou
The main advantage of trading using opposite Tsingtao Brewery and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.| Tsingtao Brewery vs. Guangzhou Dongfang Hotel | Tsingtao Brewery vs. Ye Chiu Metal | Tsingtao Brewery vs. Tongling Nonferrous Metals | Tsingtao Brewery vs. Jinling Hotel Corp |
| Guangxi Wuzhou vs. Hubei Geoway Investment | Guangxi Wuzhou vs. Juneyao Airlines | Guangxi Wuzhou vs. Beijing Mainstreets Investment | Guangxi Wuzhou vs. Henan Shuanghui 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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