Correlation Between Caihong Display and Tsingtao Brewery
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By analyzing existing cross correlation between Caihong Display Devices and Tsingtao Brewery Co, you can compare the effects of market volatilities on Caihong Display 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 Caihong Display with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Tsingtao Brewery.
Diversification Opportunities for Caihong Display and Tsingtao Brewery
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caihong and Tsingtao is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Tsingtao Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Caihong Display 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 Caihong Display Devices 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 Caihong Display i.e., Caihong Display and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Caihong Display and Tsingtao Brewery
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Tsingtao Brewery. In addition to that, Caihong Display is 1.12 times more volatile than Tsingtao Brewery Co. It trades about -0.11 of its total potential returns per unit of risk. Tsingtao Brewery Co is currently generating about -0.01 per unit of volatility. If you would invest 7,056 in Tsingtao Brewery Co on August 28, 2024 and sell it today you would lose (61.00) from holding Tsingtao Brewery Co or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Tsingtao Brewery Co
Performance |
| Timeline |
| Caihong Display Devices |
| Tsingtao Brewery |
Caihong Display and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Tsingtao Brewery
The main advantage of trading using opposite Caihong Display and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display 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.| Caihong Display vs. Nanjing Putian Telecommunications | Caihong Display vs. Shenzhen Hifuture Electric | Caihong Display vs. Shenyang Huitian Thermal | Caihong Display vs. Jiangsu Xinning Modern |
| Tsingtao Brewery vs. China Petroleum Chemical | Tsingtao Brewery vs. PetroChina Co Ltd | Tsingtao Brewery vs. China State Construction | Tsingtao Brewery vs. China Railway Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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