Correlation Between Tsingtao Brewery and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Molson Coors 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 Molson Coors 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 Molson Coors Brewing, you can compare the effects of market volatilities on Tsingtao Brewery and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Molson Coors.
Diversification Opportunities for Tsingtao Brewery and Molson Coors
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tsingtao and Molson is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery Co and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Molson Coors go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Molson Coors
Assuming the 90 days horizon Tsingtao Brewery is expected to generate 2.28 times less return on investment than Molson Coors. In addition to that, Tsingtao Brewery is 2.81 times more volatile than Molson Coors Brewing. It trades about 0.03 of its total potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.22 per unit of volatility. If you would invest 5,604 in Molson Coors Brewing on August 24, 2024 and sell it today you would earn a total of 434.00 from holding Molson Coors Brewing or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery Co vs. Molson Coors Brewing
Performance |
| Timeline |
| Tsingtao Brewery |
| Molson Coors Brewing |
Tsingtao Brewery and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Molson Coors
The main advantage of trading using opposite Tsingtao Brewery and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' 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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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