Correlation Between Tsingtao Brewery and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Zijin Mining 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 Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and Zijin Mining Group, you can compare the effects of market volatilities on Tsingtao Brewery and Zijin Mining 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 Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Zijin Mining.
Diversification Opportunities for Tsingtao Brewery and Zijin Mining
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tsingtao and Zijin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group 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 Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Zijin Mining go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Zijin Mining
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.66 times more return on investment than Zijin Mining. However, Tsingtao Brewery is 1.66 times more volatile than Zijin Mining Group. It trades about 0.07 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.02 per unit of risk. If you would invest 409.00 in Tsingtao Brewery on August 29, 2024 and sell it today you would earn a total of 188.00 from holding Tsingtao Brewery or generate 45.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. Zijin Mining Group
Performance |
| Timeline |
| Tsingtao Brewery |
| Zijin Mining Group |
Tsingtao Brewery and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Zijin Mining
The main advantage of trading using opposite Tsingtao Brewery and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Superior Plus Corp | Tsingtao Brewery vs. SIVERS SEMICONDUCTORS AB |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA |
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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