Correlation Between Lendlease and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Lendlease 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 Lendlease and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Tsingtao Brewery, you can compare the effects of market volatilities on Lendlease 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 Lendlease with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Tsingtao Brewery.
Diversification Opportunities for Lendlease and Tsingtao Brewery
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lendlease and Tsingtao is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Lendlease 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 Lendlease Group 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 Lendlease i.e., Lendlease and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Lendlease and Tsingtao Brewery
Assuming the 90 days trading horizon Lendlease is expected to generate 27.16 times less return on investment than Tsingtao Brewery. But when comparing it to its historical volatility, Lendlease Group is 1.2 times less risky than Tsingtao Brewery. It trades about 0.01 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 609.00 in Tsingtao Brewery on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Tsingtao Brewery or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Tsingtao Brewery
Performance |
| Timeline |
| Lendlease Group |
| Tsingtao Brewery |
Lendlease and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Tsingtao Brewery
The main advantage of trading using opposite Lendlease and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease 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.The idea behind Lendlease Group and Tsingtao Brewery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tsingtao Brewery vs. Lendlease Group | Tsingtao Brewery vs. PLAY2CHILL SA ZY | Tsingtao Brewery vs. BOSTON BEER A | Tsingtao Brewery vs. FUYO GENERAL LEASE |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |