Correlation Between BANKINTER ADR and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR 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 BANKINTER ADR and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANKINTER ADR 2007 and Tsingtao Brewery, you can compare the effects of market volatilities on BANKINTER ADR 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 BANKINTER ADR with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Tsingtao Brewery.
Diversification Opportunities for BANKINTER ADR and Tsingtao Brewery
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANKINTER and Tsingtao is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and BANKINTER ADR 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 BANKINTER ADR 2007 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 BANKINTER ADR i.e., BANKINTER ADR and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between BANKINTER ADR and Tsingtao Brewery
Assuming the 90 days horizon BANKINTER ADR is expected to generate 7.27 times less return on investment than Tsingtao Brewery. But when comparing it to its historical volatility, BANKINTER ADR 2007 is 1.05 times less risky than Tsingtao Brewery. It trades about 0.05 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 577.00 in Tsingtao Brewery on September 26, 2024 and sell it today you would earn a total of 83.00 from holding Tsingtao Brewery or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. Tsingtao Brewery
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| Tsingtao Brewery |
BANKINTER ADR and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and Tsingtao Brewery
The main advantage of trading using opposite BANKINTER ADR and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR 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.| BANKINTER ADR vs. Commercial Vehicle Group | BANKINTER ADR vs. CompuGroup Medical SE | BANKINTER ADR vs. Microbot Medical | BANKINTER ADR vs. Chesapeake Utilities |
| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Microsoft | Tsingtao Brewery vs. Microsoft |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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