Correlation Between Tsingtao Brewery and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and LEWAG HOLDING 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 LEWAG HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and LEWAG HOLDING AG, you can compare the effects of market volatilities on Tsingtao Brewery and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and LEWAG HOLDING.
Diversification Opportunities for Tsingtao Brewery and LEWAG HOLDING
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and LEWAG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING AG 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and LEWAG HOLDING
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.95 times more return on investment than LEWAG HOLDING. However, Tsingtao Brewery is 1.95 times more volatile than LEWAG HOLDING AG. It trades about 0.03 of its potential returns per unit of risk. LEWAG HOLDING AG is currently generating about -0.02 per unit of risk. If you would invest 473.00 in Tsingtao Brewery on September 5, 2024 and sell it today you would earn a total of 127.00 from holding Tsingtao Brewery or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tsingtao Brewery vs. LEWAG HOLDING AG
Performance |
| Timeline |
| Tsingtao Brewery |
| LEWAG HOLDING AG |
Tsingtao Brewery and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and LEWAG HOLDING
The main advantage of trading using opposite Tsingtao Brewery and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING's long position.| Tsingtao Brewery vs. TOTAL GABON | Tsingtao Brewery vs. Walgreens Boots Alliance | Tsingtao Brewery vs. Peak Resources Limited |
| LEWAG HOLDING vs. Chunghwa Telecom Co | LEWAG HOLDING vs. Tsingtao Brewery | LEWAG HOLDING vs. Consolidated Communications Holdings | LEWAG HOLDING vs. Citic Telecom International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |