Correlation Between Xiamen Goldenhome and Tsingtao Brewery
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By analyzing existing cross correlation between Xiamen Goldenhome Co and Tsingtao Brewery Co, you can compare the effects of market volatilities on Xiamen Goldenhome 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 Xiamen Goldenhome with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Goldenhome and Tsingtao Brewery.
Diversification Opportunities for Xiamen Goldenhome and Tsingtao Brewery
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xiamen and Tsingtao is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Goldenhome Co and Tsingtao Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Xiamen Goldenhome 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 Xiamen Goldenhome Co 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 Xiamen Goldenhome i.e., Xiamen Goldenhome and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Xiamen Goldenhome and Tsingtao Brewery
Assuming the 90 days trading horizon Xiamen Goldenhome Co is expected to generate 1.16 times more return on investment than Tsingtao Brewery. However, Xiamen Goldenhome is 1.16 times more volatile than Tsingtao Brewery Co. It trades about 0.1 of its potential returns per unit of risk. Tsingtao Brewery Co is currently generating about 0.07 per unit of risk. If you would invest 2,052 in Xiamen Goldenhome Co on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Xiamen Goldenhome Co or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xiamen Goldenhome Co vs. Tsingtao Brewery Co
Performance |
| Timeline |
| Xiamen Goldenhome |
| Tsingtao Brewery |
Xiamen Goldenhome and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Goldenhome and Tsingtao Brewery
The main advantage of trading using opposite Xiamen Goldenhome and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Goldenhome 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.| Xiamen Goldenhome vs. Lutian Machinery Co | Xiamen Goldenhome vs. PetroChina Co Ltd | Xiamen Goldenhome vs. Bank of China | Xiamen Goldenhome vs. Gansu Jiu Steel |
| Tsingtao Brewery vs. Winner Medical Co | Tsingtao Brewery vs. Tongyu Communication | Tsingtao Brewery vs. Qingdao Hi Tech Moulds | Tsingtao Brewery vs. Cofoe Medical Technology |
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