Correlation Between Tsingtao Brewery and LION ONE
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and LION ONE 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 LION ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and LION ONE METALS, you can compare the effects of market volatilities on Tsingtao Brewery and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and LION ONE.
Diversification Opportunities for Tsingtao Brewery and LION ONE
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tsingtao and LION is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and LION ONE go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and LION ONE
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.29 times more return on investment than LION ONE. However, Tsingtao Brewery is 1.29 times more volatile than LION ONE METALS. It trades about 0.05 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.05 per unit of risk. If you would invest 448.00 in Tsingtao Brewery on September 3, 2024 and sell it today you would earn a total of 140.00 from holding Tsingtao Brewery or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. LION ONE METALS
Performance |
| Timeline |
| Tsingtao Brewery |
| LION ONE METALS |
Tsingtao Brewery and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and LION ONE
The main advantage of trading using opposite Tsingtao Brewery and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| Tsingtao Brewery vs. Siamgas And Petrochemicals | Tsingtao Brewery vs. MELIA HOTELS | Tsingtao Brewery vs. JAPAN AIRLINES | Tsingtao Brewery vs. MIRAMAR HOTEL INV |
| LION ONE vs. HomeToGo SE | LION ONE vs. NORTHEAST UTILITIES | LION ONE vs. SBM OFFSHORE | LION ONE vs. Zijin Mining Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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