Correlation Between Tsingtao Brewery and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Anheuser Busch 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 Tsingtao Brewery and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery Co and Anheuser Busch Inbev, you can compare the effects of market volatilities on Tsingtao Brewery and Anheuser Busch 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 Tsingtao Brewery with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Anheuser Busch.
Diversification Opportunities for Tsingtao Brewery and Anheuser Busch
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tsingtao and Anheuser is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev and Tsingtao Brewery 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 Tsingtao Brewery Co are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Anheuser Busch go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Anheuser Busch
Assuming the 90 days horizon Tsingtao Brewery Co is expected to generate 3.2 times more return on investment than Anheuser Busch. However, Tsingtao Brewery is 3.2 times more volatile than Anheuser Busch Inbev. It trades about -0.16 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.52 per unit of risk. If you would invest 3,599 in Tsingtao Brewery Co on August 27, 2024 and sell it today you would lose (599.00) from holding Tsingtao Brewery Co or give up 16.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Tsingtao Brewery |
| Anheuser Busch Inbev |
Tsingtao Brewery and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Anheuser Busch
The main advantage of trading using opposite Tsingtao Brewery and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Tsingtao Brewery vs. Barfresh Food Group | Tsingtao Brewery vs. Fbec Worldwide | Tsingtao Brewery vs. Flow Beverage Corp | Tsingtao Brewery vs. Eq Energy Drink |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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