Correlation Between Tsingtao Brewery and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and FUYO GENERAL 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 FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and FUYO GENERAL LEASE, you can compare the effects of market volatilities on Tsingtao Brewery and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and FUYO GENERAL.
Diversification Opportunities for Tsingtao Brewery and FUYO GENERAL
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and FUYO is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and FUYO GENERAL go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and FUYO GENERAL
Assuming the 90 days horizon Tsingtao Brewery is expected to generate 2.86 times more return on investment than FUYO GENERAL. However, Tsingtao Brewery is 2.86 times more volatile than FUYO GENERAL LEASE. It trades about 0.06 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.0 per unit of risk. If you would invest 409.00 in Tsingtao Brewery on September 14, 2024 and sell it today you would earn a total of 253.00 from holding Tsingtao Brewery or generate 61.86% 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. FUYO GENERAL LEASE
Performance |
| Timeline |
| Tsingtao Brewery |
| FUYO GENERAL LEASE |
Tsingtao Brewery and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and FUYO GENERAL
The main advantage of trading using opposite Tsingtao Brewery and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| Tsingtao Brewery vs. FUYO GENERAL LEASE | Tsingtao Brewery vs. NIPPON STEEL SPADR | Tsingtao Brewery vs. LEGACY IRON ORE | Tsingtao Brewery vs. RELIANCE STEEL AL |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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