Correlation Between Bank of China and Tsingtao Brewery
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By analyzing existing cross correlation between Bank of China and Tsingtao Brewery Co, you can compare the effects of market volatilities on Bank of China 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 Bank of China with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Tsingtao Brewery.
Diversification Opportunities for Bank of China and Tsingtao Brewery
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Tsingtao is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Tsingtao Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Bank of China 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 Bank of China 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 Bank of China i.e., Bank of China and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Bank of China and Tsingtao Brewery
Assuming the 90 days trading horizon Bank of China is expected to generate 3.38 times less return on investment than Tsingtao Brewery. But when comparing it to its historical volatility, Bank of China is 2.72 times less risky than Tsingtao Brewery. It trades about 0.14 of its potential returns per unit of risk. Tsingtao Brewery Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,700 in Tsingtao Brewery Co on September 2, 2024 and sell it today you would earn a total of 598.00 from holding Tsingtao Brewery Co or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Tsingtao Brewery Co
Performance |
| Timeline |
| Bank of China |
| Tsingtao Brewery |
Bank of China and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Tsingtao Brewery
The main advantage of trading using opposite Bank of China and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China 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.| Bank of China vs. Marssenger Kitchenware Co | Bank of China vs. Thinkingdom Media Group | Bank of China vs. Hengdian Entertainment Co | Bank of China vs. Lander Sports Development |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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