Correlation Between Tsingtao Brewery and Penta Ocean

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

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

Diversification Opportunities for Tsingtao Brewery and Penta Ocean

-0.48

Correlation Coefficient

Tsingtao Brewery  Penta Ocean

Very good diversification

The 3 months correlation between Tsingtao and Penta is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc 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 Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of Tsingtao Brewery i.e., Tsingtao Brewery and Penta Ocean go up and down completely randomly.

Pair Corralation between Tsingtao Brewery and Penta Ocean

Assuming the 90 days trading horizon Tsingtao Brewery is expected to under-perform the Penta Ocean. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery is 1.07 times less risky than Penta Ocean. The stock trades about -0.07 of its potential returns per unit of risk. The Penta Ocean Construction Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  484.00  in Penta Ocean Construction Co on April 24, 2025 and sell it today you would earn a total of  51.00  from holding Penta Ocean Construction Co or generate 10.54% return on investment over 90 days.

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

Tsingtao Brewery  vs.  Penta Ocean Construction Co

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 unsteady 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.

Penta Ocean Construc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Penta Ocean may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Tsingtao Brewery and Penta Ocean

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

The idea behind Tsingtao Brewery and Penta Ocean Construction Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.