Correlation Between TRADEGATE and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both TRADEGATE 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 TRADEGATE and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and Tsingtao Brewery, you can compare the effects of market volatilities on TRADEGATE 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 TRADEGATE with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and Tsingtao Brewery.
Diversification Opportunities for TRADEGATE and Tsingtao Brewery
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between TRADEGATE and Tsingtao is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and TRADEGATE 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 TRADEGATE 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 TRADEGATE i.e., TRADEGATE and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between TRADEGATE and Tsingtao Brewery
Assuming the 90 days trading horizon TRADEGATE is expected to under-perform the Tsingtao Brewery. But the stock apears to be less risky and, when comparing its historical volatility, TRADEGATE is 4.34 times less risky than Tsingtao Brewery. The stock trades about -0.12 of its potential returns per unit of risk. The Tsingtao Brewery is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 421.00 in Tsingtao Brewery on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Tsingtao Brewery or generate 42.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. Tsingtao Brewery
Performance |
| Timeline |
| TRADEGATE |
| Tsingtao Brewery |
TRADEGATE and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and Tsingtao Brewery
The main advantage of trading using opposite TRADEGATE and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE 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 TRADEGATE 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. Siamgas And Petrochemicals | Tsingtao Brewery vs. MELIA HOTELS | Tsingtao Brewery vs. JAPAN AIRLINES | Tsingtao Brewery vs. MIRAMAR HOTEL INV |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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