Correlation Between Nanhua Bio and Kweichow Moutai
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By analyzing existing cross correlation between Nanhua Bio Medicine and Kweichow Moutai Co, you can compare the effects of market volatilities on Nanhua Bio 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 Nanhua Bio with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Kweichow Moutai.
Diversification Opportunities for Nanhua Bio and Kweichow Moutai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanhua and Kweichow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Nanhua Bio 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 Nanhua Bio Medicine 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 Nanhua Bio i.e., Nanhua Bio and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Nanhua Bio and Kweichow Moutai
Assuming the 90 days trading horizon Nanhua Bio Medicine is expected to generate 2.25 times more return on investment than Kweichow Moutai. However, Nanhua Bio is 2.25 times more volatile than Kweichow Moutai Co. It trades about 0.01 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.01 per unit of risk. If you would invest 1,187 in Nanhua Bio Medicine on September 12, 2024 and sell it today you would lose (137.00) from holding Nanhua Bio Medicine or give up 11.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Kweichow Moutai Co
Performance |
| Timeline |
| Nanhua Bio Medicine |
| Kweichow Moutai |
Nanhua Bio and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Kweichow Moutai
The main advantage of trading using opposite Nanhua Bio and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio 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.| Nanhua Bio vs. Kweichow Moutai Co | Nanhua Bio vs. Shenzhen Mindray Bio Medical | Nanhua Bio vs. G bits Network Technology | Nanhua Bio vs. Beijing Roborock Technology |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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