Correlation Between Tsingtao Brewery and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Tsingtao Brewery and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Dow Jones.
Diversification Opportunities for Tsingtao Brewery and Dow Jones
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tsingtao and Dow is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Dow Jones go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Dow Jones
Assuming the 90 days horizon Tsingtao Brewery Co is expected to generate 5.18 times more return on investment than Dow Jones. However, Tsingtao Brewery is 5.18 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 2,683 in Tsingtao Brewery Co on August 28, 2024 and sell it today you would earn a total of 317.00 from holding Tsingtao Brewery Co or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.22% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Dow Jones Industrial
Performance |
| Timeline |
Tsingtao Brewery and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Tsingtao Brewery Co
Pair trading matchups for Tsingtao Brewery
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Tsingtao Brewery and Dow Jones
The main advantage of trading using opposite Tsingtao Brewery and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Tsingtao Brewery vs. Jiangsu Expressway Co | Tsingtao Brewery vs. Tsingtao Brewery | Tsingtao Brewery vs. TravelSky Technology Ltd | Tsingtao Brewery vs. Air China Ltd |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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