Correlation Between Tsingtao Brewery and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and COSTCO WHOLESALE 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 COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Tsingtao Brewery and COSTCO WHOLESALE 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 COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and COSTCO WHOLESALE.
Diversification Opportunities for Tsingtao Brewery and COSTCO WHOLESALE
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and COSTCO is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and COSTCO WHOLESALE
Assuming the 90 days trading horizon Tsingtao Brewery is expected to under-perform the COSTCO WHOLESALE. In addition to that, Tsingtao Brewery is 1.3 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.0 of its total potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.28 per unit of volatility. If you would invest 2,655 in COSTCO WHOLESALE CDR on September 1, 2024 and sell it today you would earn a total of 305.00 from holding COSTCO WHOLESALE CDR or generate 11.49% 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. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| Tsingtao Brewery |
| COSTCO WHOLESALE CDR |
Tsingtao Brewery and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and COSTCO WHOLESALE
The main advantage of trading using opposite Tsingtao Brewery and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE'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 |
| COSTCO WHOLESALE vs. Air Lease | COSTCO WHOLESALE vs. XLMedia PLC | COSTCO WHOLESALE vs. Hollywood Bowl Group | COSTCO WHOLESALE vs. Beijing Media |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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