Correlation Between Xiamen Kehua and Kweichow Moutai
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By analyzing existing cross correlation between Xiamen Kehua Hengsheng and Kweichow Moutai Co, you can compare the effects of market volatilities on Xiamen Kehua 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 Xiamen Kehua with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Kehua and Kweichow Moutai.
Diversification Opportunities for Xiamen Kehua and Kweichow Moutai
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xiamen and Kweichow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Kehua Hengsheng and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Xiamen Kehua 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 Xiamen Kehua Hengsheng 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 Xiamen Kehua i.e., Xiamen Kehua and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Xiamen Kehua and Kweichow Moutai
Assuming the 90 days trading horizon Xiamen Kehua Hengsheng is expected to generate 5.01 times more return on investment than Kweichow Moutai. However, Xiamen Kehua is 5.01 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 -0.2 per unit of risk. If you would invest 2,338 in Xiamen Kehua Hengsheng on October 18, 2024 and sell it today you would earn a total of 701.00 from holding Xiamen Kehua Hengsheng or generate 29.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Kehua Hengsheng vs. Kweichow Moutai Co
Performance |
| Timeline |
| Xiamen Kehua Hengsheng |
| Kweichow Moutai |
Xiamen Kehua and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Kehua and Kweichow Moutai
The main advantage of trading using opposite Xiamen Kehua and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Kehua 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.| Xiamen Kehua vs. China Petroleum Chemical | Xiamen Kehua vs. PetroChina Co Ltd | Xiamen Kehua vs. China State Construction | Xiamen Kehua vs. China Railway Group |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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