Correlation Between Tsingtao Brewery and REMEDY ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and REMEDY ENTERTAINMENT OYJ, you can compare the effects of market volatilities on Tsingtao Brewery and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and REMEDY ENTERTAINMENT.
Diversification Opportunities for Tsingtao Brewery and REMEDY ENTERTAINMENT
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tsingtao and REMEDY is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and REMEDY ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and REMEDY ENTERTAINMENT
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.37 times more return on investment than REMEDY ENTERTAINMENT. However, Tsingtao Brewery is 1.37 times more volatile than REMEDY ENTERTAINMENT OYJ. It trades about 0.03 of its potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about -0.02 per unit of risk. If you would invest 492.00 in Tsingtao Brewery on September 14, 2024 and sell it today you would earn a total of 172.00 from holding Tsingtao Brewery or generate 34.96% 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. REMEDY ENTERTAINMENT OYJ
Performance |
| Timeline |
| Tsingtao Brewery |
| REMEDY ENTERTAINMENT OYJ |
Tsingtao Brewery and REMEDY ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and REMEDY ENTERTAINMENT
The main advantage of trading using opposite Tsingtao Brewery and REMEDY ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT will offset losses from the drop in REMEDY ENTERTAINMENT's long position.| Tsingtao Brewery vs. Lendlease Group | Tsingtao Brewery vs. PLAY2CHILL SA ZY | Tsingtao Brewery vs. BOSTON BEER A | Tsingtao Brewery vs. FUYO GENERAL LEASE |
| REMEDY ENTERTAINMENT vs. SCANSOURCE | REMEDY ENTERTAINMENT vs. Tsingtao Brewery | REMEDY ENTERTAINMENT vs. SLR Investment Corp | REMEDY ENTERTAINMENT vs. Postal Savings Bank |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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