Correlation Between TravelSky Technology and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both TravelSky Technology and Tsingtao Brewery 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 TravelSky Technology and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TravelSky Technology Ltd and Tsingtao Brewery, you can compare the effects of market volatilities on TravelSky Technology and Tsingtao Brewery 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 TravelSky Technology with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of TravelSky Technology and Tsingtao Brewery.
Diversification Opportunities for TravelSky Technology and Tsingtao Brewery
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TravelSky and Tsingtao is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding TravelSky Technology Ltd and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and TravelSky Technology 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 TravelSky Technology Ltd are associated (or correlated) with Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of TravelSky Technology i.e., TravelSky Technology and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between TravelSky Technology and Tsingtao Brewery
Assuming the 90 days horizon TravelSky Technology Ltd is expected to generate 0.66 times more return on investment than Tsingtao Brewery. However, TravelSky Technology Ltd is 1.51 times less risky than Tsingtao Brewery. It trades about 0.06 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.02 per unit of risk. If you would invest 987.00 in TravelSky Technology Ltd on August 28, 2024 and sell it today you would earn a total of 303.00 from holding TravelSky Technology Ltd or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 79.81% |
| Values | Daily Returns |
TravelSky Technology Ltd vs. Tsingtao Brewery
Performance |
| Timeline |
| TravelSky Technology |
| Tsingtao Brewery |
TravelSky Technology and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TravelSky Technology and Tsingtao Brewery
The main advantage of trading using opposite TravelSky Technology and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TravelSky Technology position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| TravelSky Technology vs. Two Hands Corp | TravelSky Technology vs. Visium Technologies | TravelSky Technology vs. Tautachrome | TravelSky Technology vs. V Group |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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