Correlation Between Tsingtao Brewery and DEUTSCHE WOHNEN
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on Tsingtao Brewery and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and DEUTSCHE WOHNEN.
Diversification Opportunities for Tsingtao Brewery and DEUTSCHE WOHNEN
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and DEUTSCHE is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 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 DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and DEUTSCHE WOHNEN go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and DEUTSCHE WOHNEN
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 0.91 times more return on investment than DEUTSCHE WOHNEN. However, Tsingtao Brewery is 1.1 times less risky than DEUTSCHE WOHNEN. It trades about 0.02 of its potential returns per unit of risk. DEUTSCHE WOHNEN ADRS12 is currently generating about -0.11 per unit of risk. If you would invest 588.00 in Tsingtao Brewery on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Tsingtao Brewery or generate 0.85% 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. DEUTSCHE WOHNEN ADRS12
Performance |
| Timeline |
| Tsingtao Brewery |
| DEUTSCHE WOHNEN ADRS12 |
Tsingtao Brewery and DEUTSCHE WOHNEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and DEUTSCHE WOHNEN
The main advantage of trading using opposite Tsingtao Brewery and DEUTSCHE WOHNEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN will offset losses from the drop in DEUTSCHE WOHNEN's long position.| Tsingtao Brewery vs. ZURICH INSURANCE GROUP | Tsingtao Brewery vs. Autohome ADR | Tsingtao Brewery vs. HANOVER INSURANCE | Tsingtao Brewery vs. UNIQA INSURANCE GR |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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