Correlation Between Tsingtao Brewery and BANKINTER ADR
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and BANKINTER ADR 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 BANKINTER ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and BANKINTER ADR 2007, you can compare the effects of market volatilities on Tsingtao Brewery and BANKINTER ADR 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 BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and BANKINTER ADR.
Diversification Opportunities for Tsingtao Brewery and BANKINTER ADR
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tsingtao and BANKINTER is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 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 BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and BANKINTER ADR go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and BANKINTER ADR
Assuming the 90 days trading horizon Tsingtao Brewery is expected to under-perform the BANKINTER ADR. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery is 1.73 times less risky than BANKINTER ADR. The stock trades about -0.26 of its potential returns per unit of risk. The BANKINTER ADR 2007 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 715.00 in BANKINTER ADR 2007 on October 14, 2024 and sell it today you would earn a total of 30.00 from holding BANKINTER ADR 2007 or generate 4.2% 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. BANKINTER ADR 2007
Performance |
| Timeline |
| Tsingtao Brewery |
| BANKINTER ADR 2007 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Tsingtao Brewery and BANKINTER ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and BANKINTER ADR
The main advantage of trading using opposite Tsingtao Brewery and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, BANKINTER ADR 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 BANKINTER ADR will offset losses from the drop in BANKINTER ADR's long position.| Tsingtao Brewery vs. Transport International Holdings | Tsingtao Brewery vs. EVS Broadcast Equipment | Tsingtao Brewery vs. Broadridge Financial Solutions | Tsingtao Brewery vs. Fortescue Metals Group |
| BANKINTER ADR vs. Sixt Leasing SE | BANKINTER ADR vs. ecotel communication ag | BANKINTER ADR vs. TOWNSQUARE MEDIA INC | BANKINTER ADR vs. China Communications Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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