Correlation Between Tsingtao Brewery and NOV
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and NOV 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 NOV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and NOV Inc, you can compare the effects of market volatilities on Tsingtao Brewery and NOV 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 NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and NOV.
Diversification Opportunities for Tsingtao Brewery and NOV
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tsingtao and NOV is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc 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 NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and NOV go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and NOV
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 0.6 times more return on investment than NOV. However, Tsingtao Brewery is 1.65 times less risky than NOV. It trades about 0.24 of its potential returns per unit of risk. NOV Inc is currently generating about 0.07 per unit of risk. If you would invest 579.00 in Tsingtao Brewery on December 1, 2024 and sell it today you would earn a total of 60.00 from holding Tsingtao Brewery or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. NOV Inc
Performance |
| Timeline |
| Tsingtao Brewery |
| NOV Inc |
Tsingtao Brewery and NOV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and NOV
The main advantage of trading using opposite Tsingtao Brewery and NOV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, NOV 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 NOV will offset losses from the drop in NOV's long position.| Tsingtao Brewery vs. AUST AGRICULTURAL | Tsingtao Brewery vs. AGF Management Limited | Tsingtao Brewery vs. Cleanaway Waste Management | Tsingtao Brewery vs. Sumitomo Mitsui Construction |
| NOV vs. CanSino Biologics | NOV vs. Tower Semiconductor | NOV vs. GUILD ESPORTS PLC | NOV vs. Magnachip Semiconductor |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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