Correlation Between Beijing Zhong and Kweichow Moutai
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By analyzing existing cross correlation between Beijing Zhong Ke and Kweichow Moutai Co, you can compare the effects of market volatilities on Beijing Zhong 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 Beijing Zhong with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Zhong and Kweichow Moutai.
Diversification Opportunities for Beijing Zhong and Kweichow Moutai
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Kweichow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Zhong Ke and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Beijing Zhong 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 Beijing Zhong Ke 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 Beijing Zhong i.e., Beijing Zhong and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Beijing Zhong and Kweichow Moutai
Assuming the 90 days trading horizon Beijing Zhong Ke is expected to generate 1.42 times more return on investment than Kweichow Moutai. However, Beijing Zhong is 1.42 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 -0.02 per unit of risk. If you would invest 1,044 in Beijing Zhong Ke on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Beijing Zhong Ke or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Zhong Ke vs. Kweichow Moutai Co
Performance |
| Timeline |
| Beijing Zhong Ke |
| Kweichow Moutai |
Beijing Zhong and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Zhong and Kweichow Moutai
The main advantage of trading using opposite Beijing Zhong and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Zhong 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.| Beijing Zhong vs. De Rucci Healthy | Beijing Zhong vs. Everjoy Health Group | Beijing Zhong vs. Hangzhou Minsheng Healthcare | Beijing Zhong vs. Meinian Onehealth Healthcare |
| Kweichow Moutai vs. Caihong Display Devices | Kweichow Moutai vs. Ningxia Building Materials | Kweichow Moutai vs. Guangzhou Tinci Materials | Kweichow Moutai vs. Cultural Investment Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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