Correlation Between Automatic Data and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Automatic Data 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 Automatic Data and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Tsingtao Brewery, you can compare the effects of market volatilities on Automatic Data 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 Automatic Data with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Tsingtao Brewery.
Diversification Opportunities for Automatic Data and Tsingtao Brewery
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Automatic and Tsingtao is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and Automatic Data 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 Automatic Data Processing 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 Automatic Data i.e., Automatic Data and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Automatic Data and Tsingtao Brewery
Assuming the 90 days horizon Automatic Data Processing is expected to under-perform the Tsingtao Brewery. But the stock apears to be less risky and, when comparing its historical volatility, Automatic Data Processing is 1.66 times less risky than Tsingtao Brewery. The stock trades about -0.09 of its potential returns per unit of risk. The Tsingtao Brewery is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 577.00 in Tsingtao Brewery on September 24, 2024 and sell it today you would earn a total of 80.00 from holding Tsingtao Brewery or generate 13.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Automatic Data Processing vs. Tsingtao Brewery
Performance |
Timeline |
Automatic Data Processing |
Tsingtao Brewery |
Automatic Data and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Automatic Data and Tsingtao Brewery
The main advantage of trading using opposite Automatic Data and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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.Automatic Data vs. Fiserv Inc | Automatic Data vs. Paychex | Automatic Data vs. Experian plc | Automatic Data vs. Verisk Analytics |
Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Microsoft |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |