Correlation Between Tsingtao Brewery and MCEWEN MINING

Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery and MCEWEN MINING 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 MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tsingtao Brewery and MCEWEN MINING INC, you can compare the effects of market volatilities on Tsingtao Brewery and MCEWEN MINING 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 MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and MCEWEN MINING.

Diversification Opportunities for Tsingtao Brewery and MCEWEN MINING

0.2

Correlation Coefficient

Tsingtao Brewery  MCEWEN MINING

Modest diversification

The 3 months correlation between Tsingtao and MCEWEN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Tsingtao Brewery and MCEWEN MINING

Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.08 times more return on investment than MCEWEN MINING. However, Tsingtao Brewery is 1.08 times more volatile than MCEWEN MINING INC. It trades about 0.16 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.01 per unit of risk. If you would invest  465.00  in Tsingtao Brewery on September 17, 2024 and sell it today you would earn a total of  199.00  from holding Tsingtao Brewery or generate 42.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tsingtao Brewery  vs.  MCEWEN MINING INC

Tsingtao Brewery

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tsingtao Brewery are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Tsingtao Brewery exhibited solid returns over the last few months and may actually be approaching a breakup point.

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCEWEN MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MCEWEN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tsingtao Brewery and MCEWEN MINING

The main advantage of trading using opposite Tsingtao Brewery and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery position performs unexpectedly, MCEWEN MINING 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 MCEWEN MINING will offset losses from the drop in MCEWEN MINING's long position.

The idea behind Tsingtao Brewery and MCEWEN MINING INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.