Correlation Between Tsingtao Brewery and MICRONIC MYDATA

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Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and MICRONIC MYDATA 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 MICRONIC MYDATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and MICRONIC MYDATA, you can compare the effects of market volatilities on Tsingtao Brewery and MICRONIC MYDATA 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 MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and MICRONIC MYDATA.

Diversification Opportunities for Tsingtao Brewery and MICRONIC MYDATA

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Tsingtao and MICRONIC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA 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 MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and MICRONIC MYDATA go up and down completely randomly.

Pair Corralation between Tsingtao Brewery and MICRONIC MYDATA

Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.25 times more return on investment than MICRONIC MYDATA. However, Tsingtao Brewery is 1.25 times more volatile than MICRONIC MYDATA. It trades about -0.03 of its potential returns per unit of risk. MICRONIC MYDATA is currently generating about -0.19 per unit of risk. If you would invest  596.00  in Tsingtao Brewery on August 31, 2024 and sell it today you would lose (13.00) from holding Tsingtao Brewery or give up 2.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Tsingtao Brewery  vs.  MICRONIC MYDATA

 Performance 
       Timeline  
Tsingtao Brewery 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Tsingtao Brewery are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Tsingtao Brewery exhibited solid returns over the last few months and may actually be approaching a breakup point.
MICRONIC MYDATA 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in MICRONIC MYDATA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, MICRONIC MYDATA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Tsingtao Brewery and MICRONIC MYDATA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tsingtao Brewery and MICRONIC MYDATA

The main advantage of trading using opposite Tsingtao Brewery and MICRONIC MYDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, MICRONIC MYDATA 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 MICRONIC MYDATA will offset losses from the drop in MICRONIC MYDATA's long position.
The idea behind Tsingtao Brewery and MICRONIC MYDATA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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