Correlation Between Tsingtao Brewery and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and WIMFARM SA EO, you can compare the effects of market volatilities on Tsingtao Brewery and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and WIMFARM SA.
Diversification Opportunities for Tsingtao Brewery and WIMFARM SA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tsingtao and WIMFARM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and WIMFARM SA go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and WIMFARM SA
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.62 times more return on investment than WIMFARM SA. However, Tsingtao Brewery is 1.62 times more volatile than WIMFARM SA EO. It trades about 0.07 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.06 per unit of risk. If you would invest 417.00 in Tsingtao Brewery on September 1, 2024 and sell it today you would earn a total of 171.00 from holding Tsingtao Brewery or generate 41.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. WIMFARM SA EO
Performance |
| Timeline |
| Tsingtao Brewery |
| WIMFARM SA EO |
Tsingtao Brewery and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and WIMFARM SA
The main advantage of trading using opposite Tsingtao Brewery and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Tsingtao Brewery vs. Chongqing Machinery Electric | Tsingtao Brewery vs. AUST AGRICULTURAL | Tsingtao Brewery vs. Nufarm Limited | Tsingtao Brewery vs. AGRICULTBK HADR25 YC |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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