Correlation Between Tsingtao Brewery and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and RETAIL FOOD 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 RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Tsingtao Brewery and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and RETAIL FOOD.
Diversification Opportunities for Tsingtao Brewery and RETAIL FOOD
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tsingtao and RETAIL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and RETAIL FOOD
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 0.64 times more return on investment than RETAIL FOOD. However, Tsingtao Brewery is 1.55 times less risky than RETAIL FOOD. It trades about -0.16 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.31 per unit of risk. If you would invest 660.00 in Tsingtao Brewery on October 24, 2024 and sell it today you would lose (27.00) from holding Tsingtao Brewery or give up 4.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Tsingtao Brewery |
| RETAIL FOOD GROUP |
Tsingtao Brewery and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and RETAIL FOOD
The main advantage of trading using opposite Tsingtao Brewery and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Tsingtao Brewery vs. Fuji Media Holdings | Tsingtao Brewery vs. Sumitomo Rubber Industries | Tsingtao Brewery vs. The Yokohama Rubber | Tsingtao Brewery vs. Compagnie Plastic Omnium |
| RETAIL FOOD vs. BJs Restaurants | RETAIL FOOD vs. Haverty Furniture Companies | RETAIL FOOD vs. Haier Smart Home | RETAIL FOOD vs. Urban Outfitters |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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