Correlation Between China Railway and Tsingtao Brewery
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By analyzing existing cross correlation between China Railway Group and Tsingtao Brewery Co, you can compare the effects of market volatilities on China Railway 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 China Railway with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Tsingtao Brewery.
Diversification Opportunities for China Railway and Tsingtao Brewery
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Tsingtao is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Tsingtao Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and China Railway 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 China Railway Group 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 China Railway i.e., China Railway and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between China Railway and Tsingtao Brewery
Assuming the 90 days trading horizon China Railway Group is expected to generate 0.93 times more return on investment than Tsingtao Brewery. However, China Railway Group is 1.07 times less risky than Tsingtao Brewery. It trades about 0.02 of its potential returns per unit of risk. Tsingtao Brewery Co is currently generating about -0.01 per unit of risk. If you would invest 626.00 in China Railway Group on August 29, 2024 and sell it today you would earn a total of 12.00 from holding China Railway Group or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Tsingtao Brewery Co
Performance |
| Timeline |
| China Railway Group |
| Tsingtao Brewery |
China Railway and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Tsingtao Brewery
The main advantage of trading using opposite China Railway and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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.| China Railway vs. Hangzhou Gisway Information | China Railway vs. ButOne Information Corp | China Railway vs. Chinese Universe Publishing | China Railway vs. Zhejiang Publishing Media |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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