Correlation Between Tsingtao Brewery and Fuzhou Rockchip
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By analyzing existing cross correlation between Tsingtao Brewery Co and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Tsingtao Brewery and Fuzhou Rockchip 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 Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Fuzhou Rockchip.
Diversification Opportunities for Tsingtao Brewery and Fuzhou Rockchip
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tsingtao and Fuzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec 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 Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Fuzhou Rockchip
Assuming the 90 days trading horizon Tsingtao Brewery Co is expected to under-perform the Fuzhou Rockchip. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery Co is 1.43 times less risky than Fuzhou Rockchip. The stock trades about -0.03 of its potential returns per unit of risk. The Fuzhou Rockchip Electronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,445 in Fuzhou Rockchip Electronics on August 29, 2024 and sell it today you would earn a total of 766.00 from holding Fuzhou Rockchip Electronics or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Fuzhou Rockchip Electronics
Performance |
| Timeline |
| Tsingtao Brewery |
| Fuzhou Rockchip Elec |
Tsingtao Brewery and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Fuzhou Rockchip
The main advantage of trading using opposite Tsingtao Brewery and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.| Tsingtao Brewery vs. PetroChina Co Ltd | Tsingtao Brewery vs. China Mobile Limited | Tsingtao Brewery vs. Ping An Insurance | Tsingtao Brewery vs. China Petroleum Chemical |
| Fuzhou Rockchip vs. China State Construction | Fuzhou Rockchip vs. Huafa Industrial Co | Fuzhou Rockchip vs. China International Capital | Fuzhou Rockchip vs. Kweichow Moutai Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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