Correlation Between PKSHA TECHNOLOGY and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and Tsingtao Brewery at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PKSHA TECHNOLOGY and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and Tsingtao Brewery, you can compare the effects of market volatilities on PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Tsingtao Brewery.
Diversification Opportunities for PKSHA TECHNOLOGY and Tsingtao Brewery
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between PKSHA and Tsingtao is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Tsingtao Brewery
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.58 times more return on investment than Tsingtao Brewery. However, PKSHA TECHNOLOGY is 1.58 times more volatile than Tsingtao Brewery. It trades about 0.09 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about -0.01 per unit of risk. If you would invest 2,100 in PKSHA TECHNOLOGY INC on November 1, 2024 and sell it today you would earn a total of 300.00 from holding PKSHA TECHNOLOGY INC or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. Tsingtao Brewery
Performance |
Timeline |
PKSHA TECHNOLOGY INC |
Tsingtao Brewery |
PKSHA TECHNOLOGY and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PKSHA TECHNOLOGY and Tsingtao Brewery
The main advantage of trading using opposite PKSHA TECHNOLOGY and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY 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.PKSHA TECHNOLOGY vs. Regal Hotels International | PKSHA TECHNOLOGY vs. ITALIAN WINE BRANDS | PKSHA TECHNOLOGY vs. PLAYTIKA HOLDING DL 01 | PKSHA TECHNOLOGY vs. CHINA TONTINE WINES |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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