Correlation Between GRUPO CARSO-A1 and Tsingtao Brewery

Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 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 GRUPO CARSO-A1 and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRUPO CARSO A1 and Tsingtao Brewery, you can compare the effects of market volatilities on GRUPO CARSO-A1 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 GRUPO CARSO-A1 with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and Tsingtao Brewery.

Diversification Opportunities for GRUPO CARSO-A1 and Tsingtao Brewery

-0.46

Correlation Coefficient

GRUPO CARSO-A1  Tsingtao Brewery

Very good diversification

The 3 months correlation between GRUPO and Tsingtao is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and GRUPO CARSO-A1 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 GRUPO CARSO A1 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 GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and Tsingtao Brewery go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and Tsingtao Brewery

Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 1.41 times more return on investment than Tsingtao Brewery. However, GRUPO CARSO-A1 is 1.41 times more volatile than Tsingtao Brewery. It trades about 0.03 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about -0.03 per unit of risk. If you would invest  515.00  in GRUPO CARSO A1 on December 29, 2024 and sell it today you would earn a total of  15.00  from holding GRUPO CARSO A1 or generate 2.91% return on investment over 90 days.

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

GRUPO CARSO A1  vs.  Tsingtao Brewery

GRUPO CARSO A1

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO CARSO A1 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GRUPO CARSO-A1 is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Tsingtao Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tsingtao Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Tsingtao Brewery is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GRUPO CARSO-A1 and Tsingtao Brewery

The main advantage of trading using opposite GRUPO CARSO-A1 and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 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.

The idea behind GRUPO CARSO A1 and Tsingtao Brewery 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 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.