Correlation Between REGAL ASIAN and Tsingtao Brewery

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

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

Diversification Opportunities for REGAL ASIAN and Tsingtao Brewery

-0.71

Correlation Coefficient

REGAL ASIAN  Tsingtao Brewery

Pay attention - limited upside

The 3 months correlation between REGAL and Tsingtao is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and Tsingtao Brewery go up and down completely randomly.

Pair Corralation between REGAL ASIAN and Tsingtao Brewery

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 1.01 times more return on investment than Tsingtao Brewery. However, REGAL ASIAN is 1.01 times more volatile than Tsingtao Brewery. It trades about 0.21 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about -0.06 per unit of risk. If you would invest  89.00  in REGAL ASIAN INVESTMENTS on April 24, 2025 and sell it today you would earn a total of  21.00  from holding REGAL ASIAN INVESTMENTS or generate 23.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

REGAL ASIAN INVESTMENTS  vs.  Tsingtao Brewery

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, REGAL ASIAN reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with REGAL ASIAN and Tsingtao Brewery

The main advantage of trading using opposite REGAL ASIAN and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.