Correlation Between Tsingtao Brewery and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and SCANSOURCE, you can compare the effects of market volatilities on Tsingtao Brewery and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and SCANSOURCE (SC3SG).
Diversification Opportunities for Tsingtao Brewery and SCANSOURCE (SC3SG)
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tsingtao and SCANSOURCE is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and SCANSOURCE (SC3SG)
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.61 times more return on investment than SCANSOURCE (SC3SG). However, Tsingtao Brewery is 1.61 times more volatile than SCANSOURCE. It trades about 0.06 of its potential returns per unit of risk. SCANSOURCE is currently generating about 0.02 per unit of risk. If you would invest 524.00 in Tsingtao Brewery on August 30, 2024 and sell it today you would earn a total of 59.00 from holding Tsingtao Brewery or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. SCANSOURCE
Performance |
| Timeline |
| Tsingtao Brewery |
| SCANSOURCE (SC3SG) |
Tsingtao Brewery and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Tsingtao Brewery and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.| Tsingtao Brewery vs. MELIA HOTELS | Tsingtao Brewery vs. CHIBA BANK | Tsingtao Brewery vs. The Hanover Insurance | Tsingtao Brewery vs. Ameriprise Financial |
| SCANSOURCE (SC3SG) vs. Infrastrutture Wireless Italiane | SCANSOURCE (SC3SG) vs. CANON MARKETING JP | SCANSOURCE (SC3SG) vs. Auto Trader Group | SCANSOURCE (SC3SG) vs. Singapore Airlines Limited |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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