Correlation Between Tsingtao Brewery and REGAL ASIAN

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

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

Diversification Opportunities for Tsingtao Brewery and REGAL ASIAN

-0.72

Correlation Coefficient

Tsingtao Brewery  REGAL ASIAN

Pay attention - limited upside

The 3 months correlation between Tsingtao and REGAL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and REGAL ASIAN go up and down completely randomly.

Pair Corralation between Tsingtao Brewery and REGAL ASIAN

Assuming the 90 days trading horizon Tsingtao Brewery is expected to under-perform the REGAL ASIAN. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery is 1.06 times less risky than REGAL ASIAN. The stock trades about -0.09 of its potential returns per unit of risk. The REGAL ASIAN INVESTMENTS is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  86.00  in REGAL ASIAN INVESTMENTS on April 22, 2025 and sell it today you would earn a total of  23.00  from holding REGAL ASIAN INVESTMENTS or generate 26.74% return on investment over 90 days.

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

Tsingtao Brewery  vs.  REGAL ASIAN INVESTMENTS

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 latest uncertain performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 17 (%) 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.

Pair Trading with Tsingtao Brewery and REGAL ASIAN

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

The idea behind Tsingtao Brewery and REGAL ASIAN INVESTMENTS 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.