Correlation Between Apple and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Tsingtao Brewery, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Tsingtao Brewery.
Diversification Opportunities for Apple and Tsingtao Brewery
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and Tsingtao is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Apple 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 Apple 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 Apple i.e., Apple and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Apple and Tsingtao Brewery
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.51 times more return on investment than Tsingtao Brewery. However, Apple is 1.51 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 -0.23 per unit of risk. If you would invest 23,670 in Apple Inc on November 5, 2024 and sell it today you would lose (1,415) from holding Apple Inc or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Tsingtao Brewery
Performance |
| Timeline |
| Apple Inc |
| Tsingtao Brewery |
Apple and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Tsingtao Brewery
The main advantage of trading using opposite Apple and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. CODERE ONLINE LUX | Apple vs. HOCHSCHILD MINING | Apple vs. TROPHY GAMES DEV | Apple vs. Boyd Gaming |
| Tsingtao Brewery vs. H2O Retailing | Tsingtao Brewery vs. Casio Computer CoLtd | Tsingtao Brewery vs. Ribbon Communications | Tsingtao Brewery vs. SCANSOURCE |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |