Correlation Between Xinjiang Zhongtai and Kweichow Moutai
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By analyzing existing cross correlation between Xinjiang Zhongtai Chemical and Kweichow Moutai Co, you can compare the effects of market volatilities on Xinjiang Zhongtai 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 Xinjiang Zhongtai with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Zhongtai and Kweichow Moutai.
Diversification Opportunities for Xinjiang Zhongtai and Kweichow Moutai
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Kweichow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Zhongtai Chemical and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Xinjiang Zhongtai 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 Xinjiang Zhongtai Chemical 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 Xinjiang Zhongtai i.e., Xinjiang Zhongtai and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Xinjiang Zhongtai and Kweichow Moutai
Assuming the 90 days trading horizon Xinjiang Zhongtai Chemical is expected to generate 1.6 times more return on investment than Kweichow Moutai. However, Xinjiang Zhongtai is 1.6 times more volatile than Kweichow Moutai Co. It trades about 0.28 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.04 per unit of risk. If you would invest 406.00 in Xinjiang Zhongtai Chemical on September 5, 2024 and sell it today you would earn a total of 62.00 from holding Xinjiang Zhongtai Chemical or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Zhongtai Chemical vs. Kweichow Moutai Co
Performance |
| Timeline |
| Xinjiang Zhongtai |
| Kweichow Moutai |
Xinjiang Zhongtai and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Zhongtai and Kweichow Moutai
The main advantage of trading using opposite Xinjiang Zhongtai and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Zhongtai 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.| Xinjiang Zhongtai vs. Zijin Mining Group | Xinjiang Zhongtai vs. Wanhua Chemical Group | Xinjiang Zhongtai vs. Baoshan Iron Steel | Xinjiang Zhongtai vs. Shandong Gold Mining |
| Kweichow Moutai vs. Xiangtan Electrochemical Scientific | Kweichow Moutai vs. North Huajin Chemical | Kweichow Moutai vs. Xinjiang Zhongtai Chemical | Kweichow Moutai vs. Shenzhen SDG Information |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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