Correlation Between Tsingtao Brewery and Seven West
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and Seven West 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 Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and Seven West Media, you can compare the effects of market volatilities on Tsingtao Brewery and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Seven West.
Diversification Opportunities for Tsingtao Brewery and Seven West
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tsingtao and Seven is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Seven West go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Seven West
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 0.8 times more return on investment than Seven West. However, Tsingtao Brewery is 1.25 times less risky than Seven West. It trades about 0.03 of its potential returns per unit of risk. Seven West Media is currently generating about -0.03 per unit of risk. If you would invest 477.00 in Tsingtao Brewery on October 27, 2024 and sell it today you would earn a total of 131.00 from holding Tsingtao Brewery or generate 27.46% 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. Seven West Media
Performance |
| Timeline |
| Tsingtao Brewery |
| Seven West Media |
Tsingtao Brewery and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Seven West
The main advantage of trading using opposite Tsingtao Brewery and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc |
| Seven West vs. Q2M Managementberatung AG | Seven West vs. Platinum Investment Management | Seven West vs. AGF Management Limited | Seven West vs. Erste Group Bank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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