Correlation Between Tsingtao Brewery and Mitie Group
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Mitie Group 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 Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and Mitie Group PLC, you can compare the effects of market volatilities on Tsingtao Brewery and Mitie Group 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 Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Mitie Group.
Diversification Opportunities for Tsingtao Brewery and Mitie Group
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tsingtao and Mitie is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC 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 Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Mitie Group go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Mitie Group
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.12 times more return on investment than Mitie Group. However, Tsingtao Brewery is 1.12 times more volatile than Mitie Group PLC. It trades about 0.1 of its potential returns per unit of risk. Mitie Group PLC is currently generating about 0.11 per unit of risk. If you would invest 607.00 in Tsingtao Brewery on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Tsingtao Brewery or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. Mitie Group PLC
Performance |
| Timeline |
| Tsingtao Brewery |
| Mitie Group PLC |
Tsingtao Brewery and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Mitie Group
The main advantage of trading using opposite Tsingtao Brewery and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.| Tsingtao Brewery vs. Gamma Communications plc | Tsingtao Brewery vs. QURATE RETAIL INC | Tsingtao Brewery vs. Cogent Communications Holdings | Tsingtao Brewery vs. Zoom Video Communications |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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