Correlation Between ZTE Corp and Kweichow Moutai
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By analyzing existing cross correlation between ZTE Corp and Kweichow Moutai Co, you can compare the effects of market volatilities on ZTE Corp and Kweichow Moutai 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 ZTE Corp with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTE Corp and Kweichow Moutai.
Diversification Opportunities for ZTE Corp and Kweichow Moutai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ZTE and Kweichow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ZTE Corp and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and ZTE Corp 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 ZTE Corp are associated (or correlated) with Kweichow Moutai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kweichow Moutai has no effect on the direction of ZTE Corp i.e., ZTE Corp and Kweichow Moutai go up and down completely randomly.
Pair Corralation between ZTE Corp and Kweichow Moutai
Assuming the 90 days trading horizon ZTE Corp is expected to generate 1.22 times more return on investment than Kweichow Moutai. However, ZTE Corp is 1.22 times more volatile than Kweichow Moutai Co. It trades about 0.06 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.02 per unit of risk. If you would invest 2,661 in ZTE Corp on September 2, 2024 and sell it today you would earn a total of 455.00 from holding ZTE Corp or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZTE Corp vs. Kweichow Moutai Co
Performance |
| Timeline |
| ZTE Corp |
| Kweichow Moutai |
ZTE Corp and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTE Corp and Kweichow Moutai
The main advantage of trading using opposite ZTE Corp and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTE Corp position performs unexpectedly, Kweichow Moutai 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 Kweichow Moutai will offset losses from the drop in Kweichow Moutai's long position.| ZTE Corp vs. Anhui Huaertai Chemical | ZTE Corp vs. Kangping Technology Co | ZTE Corp vs. Kuang Chi Technologies | ZTE Corp vs. Guangzhou Jointas Chemical |
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Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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