Correlation Between China Railway and Kweichow Moutai
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By analyzing existing cross correlation between China Railway Materials and Kweichow Moutai Co, you can compare the effects of market volatilities on China Railway 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 China Railway with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Kweichow Moutai.
Diversification Opportunities for China Railway and Kweichow Moutai
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Kweichow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Materials and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and China Railway 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 China Railway Materials 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 China Railway i.e., China Railway and Kweichow Moutai go up and down completely randomly.
Pair Corralation between China Railway and Kweichow Moutai
Assuming the 90 days trading horizon China Railway Materials is expected to generate 1.03 times more return on investment than Kweichow Moutai. However, China Railway is 1.03 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 292.00 in China Railway Materials on September 4, 2024 and sell it today you would earn a total of 1.00 from holding China Railway Materials or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Materials vs. Kweichow Moutai Co
Performance |
| Timeline |
| China Railway Materials |
| Kweichow Moutai |
China Railway and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Kweichow Moutai
The main advantage of trading using opposite China Railway and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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.| China Railway vs. Industrial and Commercial | China Railway vs. China Construction Bank | China Railway vs. Agricultural Bank of | China Railway vs. Bank of China |
| Kweichow Moutai vs. Chengtun Mining Group | Kweichow Moutai vs. Chenzhou Jingui Silver | Kweichow Moutai vs. Guangdong Silvere Sci | Kweichow Moutai vs. Jinhui Mining Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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