Correlation Between Tsingtao Brewery and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and Airbus SE, you can compare the effects of market volatilities on Tsingtao Brewery and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Airbus SE.
Diversification Opportunities for Tsingtao Brewery and Airbus SE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tsingtao and Airbus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Airbus SE go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Airbus SE
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.33 times more return on investment than Airbus SE. However, Tsingtao Brewery is 1.33 times more volatile than Airbus SE. It trades about 0.31 of its potential returns per unit of risk. Airbus SE is currently generating about 0.12 per unit of risk. If you would invest 609.00 in Tsingtao Brewery on October 7, 2024 and sell it today you would earn a total of 55.00 from holding Tsingtao Brewery or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. Airbus SE
Performance |
| Timeline |
| Tsingtao Brewery |
| Airbus SE |
Tsingtao Brewery and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Airbus SE
The main advantage of trading using opposite Tsingtao Brewery and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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