Correlation Between Tsingtao Brewery and RTL GROUP
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and RTL 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 RTL 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 RTL GROUP UNSPADR, you can compare the effects of market volatilities on Tsingtao Brewery and RTL 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 RTL GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and RTL GROUP.
Diversification Opportunities for Tsingtao Brewery and RTL GROUP
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tsingtao and RTL is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and RTL GROUP UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL GROUP UNSPADR 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 RTL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL GROUP UNSPADR has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and RTL GROUP go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and RTL GROUP
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 0.75 times more return on investment than RTL GROUP. However, Tsingtao Brewery is 1.33 times less risky than RTL GROUP. It trades about -0.07 of its potential returns per unit of risk. RTL GROUP UNSPADR is currently generating about -0.09 per unit of risk. If you would invest 688.00 in Tsingtao Brewery on September 13, 2024 and sell it today you would lose (59.00) from holding Tsingtao Brewery or give up 8.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. RTL GROUP UNSPADR
Performance |
| Timeline |
| Tsingtao Brewery |
| RTL GROUP UNSPADR |
Tsingtao Brewery and RTL GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and RTL GROUP
The main advantage of trading using opposite Tsingtao Brewery and RTL GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, RTL 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 RTL GROUP will offset losses from the drop in RTL 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 |
| RTL GROUP vs. Uber Technologies | RTL GROUP vs. Warner Music Group | RTL GROUP vs. CHEMICAL INDUSTRIES | RTL GROUP vs. PKSHA TECHNOLOGY INC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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