Correlation Between Reinsurance Group and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Tsingtao Brewery, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Tsingtao Brewery.
Diversification Opportunities for Reinsurance Group and Tsingtao Brewery
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reinsurance and Tsingtao is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Reinsurance Group and Tsingtao Brewery
Assuming the 90 days trading horizon Reinsurance Group is expected to generate 2.11 times less return on investment than Tsingtao Brewery. But when comparing it to its historical volatility, Reinsurance Group of is 1.92 times less risky than Tsingtao Brewery. It trades about 0.03 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Tsingtao Brewery on January 23, 2025 and sell it today you would earn a total of 179.00 from holding Tsingtao Brewery or generate 37.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Tsingtao Brewery
Performance |
| Timeline |
| Reinsurance Group |
| Tsingtao Brewery |
Reinsurance Group and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Tsingtao Brewery
The main advantage of trading using opposite Reinsurance Group and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. Tower One Wireless | Reinsurance Group vs. Cairo Communication SpA | Reinsurance Group vs. Shenandoah Telecommunications | Reinsurance Group vs. SmarTone Telecommunications Holdings |
| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |