Correlation Between Tsingtao Brewery and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and GOLD ROAD 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 GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and GOLD ROAD RES, you can compare the effects of market volatilities on Tsingtao Brewery and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and GOLD ROAD.
Diversification Opportunities for Tsingtao Brewery and GOLD ROAD
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tsingtao and GOLD is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and GOLD ROAD go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and GOLD ROAD
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.22 times more return on investment than GOLD ROAD. However, Tsingtao Brewery is 1.22 times more volatile than GOLD ROAD RES. It trades about -0.01 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about -0.07 per unit of risk. If you would invest 594.00 in Tsingtao Brewery on September 2, 2024 and sell it today you would lose (6.00) from holding Tsingtao Brewery or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. GOLD ROAD RES
Performance |
| Timeline |
| Tsingtao Brewery |
| GOLD ROAD RES |
Tsingtao Brewery and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and GOLD ROAD
The main advantage of trading using opposite Tsingtao Brewery and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| Tsingtao Brewery vs. SIVERS SEMICONDUCTORS AB | Tsingtao Brewery vs. Darden Restaurants | Tsingtao Brewery vs. Reliance Steel Aluminum | Tsingtao Brewery vs. Q2M Managementberatung AG |
| GOLD ROAD vs. SIVERS SEMICONDUCTORS AB | GOLD ROAD vs. Darden Restaurants | GOLD ROAD vs. Reliance Steel Aluminum | GOLD ROAD vs. Q2M Managementberatung AG |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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