Correlation Between Sichuan Fulin and Kweichow Moutai
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Kweichow Moutai Co, you can compare the effects of market volatilities on Sichuan Fulin 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 Sichuan Fulin with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Kweichow Moutai.
Diversification Opportunities for Sichuan Fulin and Kweichow Moutai
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Kweichow is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Sichuan Fulin 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 Sichuan Fulin Transportation 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 Sichuan Fulin i.e., Sichuan Fulin and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Kweichow Moutai
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 1.75 times more return on investment than Kweichow Moutai. However, Sichuan Fulin is 1.75 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 794.00 in Sichuan Fulin Transportation on September 12, 2024 and sell it today you would lose (49.00) from holding Sichuan Fulin Transportation or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Kweichow Moutai Co
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Kweichow Moutai |
Sichuan Fulin and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Kweichow Moutai
The main advantage of trading using opposite Sichuan Fulin and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin 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.| Sichuan Fulin vs. Agricultural Bank of | Sichuan Fulin vs. Industrial and Commercial | Sichuan Fulin vs. Bank of China | Sichuan Fulin vs. PetroChina Co Ltd |
| Kweichow Moutai vs. Luyin Investment Group | Kweichow Moutai vs. Sichuan Fulin Transportation | Kweichow Moutai vs. Zhongshan Broad Ocean Motor | Kweichow Moutai vs. Southchip Semiconductor Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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