Correlation Between Tsingtao Brewery and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and CARSALESCOM 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 CARSALESCOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and CARSALESCOM, you can compare the effects of market volatilities on Tsingtao Brewery and CARSALESCOM 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 CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and CARSALESCOM.
Diversification Opportunities for Tsingtao Brewery and CARSALESCOM
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and CARSALESCOM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and CARSALESCOM go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and CARSALESCOM
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.31 times more return on investment than CARSALESCOM. However, Tsingtao Brewery is 1.31 times more volatile than CARSALESCOM. It trades about 0.19 of its potential returns per unit of risk. CARSALESCOM is currently generating about -0.11 per unit of risk. If you would invest 609.00 in Tsingtao Brewery on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Tsingtao Brewery or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. CARSALESCOM
Performance |
| Timeline |
| Tsingtao Brewery |
| CARSALESCOM |
Tsingtao Brewery and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and CARSALESCOM
The main advantage of trading using opposite Tsingtao Brewery and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM's long position.| Tsingtao Brewery vs. Lendlease Group | Tsingtao Brewery vs. PLAY2CHILL SA ZY | Tsingtao Brewery vs. BOSTON BEER A | Tsingtao Brewery vs. FUYO GENERAL LEASE |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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