Correlation Between Tsingtao Brewery and CTP NV

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

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

Diversification Opportunities for Tsingtao Brewery and CTP NV

0.0

Correlation Coefficient

Tsingtao Brewery  CTP NV

Pay attention - limited upside

The 3 months correlation between Tsingtao and CTP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO 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 CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV EO has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and CTP NV go up and down completely randomly.

Pair Corralation between Tsingtao Brewery and CTP NV

If you would invest  657.00  in Tsingtao Brewery on December 20, 2024 and sell it today you would earn a total of  9.00  from holding Tsingtao Brewery or generate 1.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Tsingtao Brewery  vs.  CTP NV EO

Tsingtao Brewery

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tsingtao Brewery are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Tsingtao Brewery is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

CTP NV EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTP NV EO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CTP NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tsingtao Brewery and CTP NV

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

The idea behind Tsingtao Brewery and CTP NV EO 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.