Correlation Between Tsingtao Brewery and North American
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and North American 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 North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and North American Construction, you can compare the effects of market volatilities on Tsingtao Brewery and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and North American.
Diversification Opportunities for Tsingtao Brewery and North American
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tsingtao and North is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and North American Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Const 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Const has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and North American go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and North American
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.33 times more return on investment than North American. However, Tsingtao Brewery is 1.33 times more volatile than North American Construction. It trades about 0.11 of its potential returns per unit of risk. North American Construction is currently generating about 0.1 per unit of risk. If you would invest 533.00 in Tsingtao Brewery on September 25, 2024 and sell it today you would earn a total of 127.00 from holding Tsingtao Brewery or generate 23.83% 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. North American Construction
Performance |
Timeline |
Tsingtao Brewery |
North American Const |
Tsingtao Brewery and North American Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tsingtao Brewery and North American
The main advantage of trading using opposite Tsingtao Brewery and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Microsoft |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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