Correlation Between Zhejiang Construction and Kweichow Moutai
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By analyzing existing cross correlation between Zhejiang Construction Investment and Kweichow Moutai Co, you can compare the effects of market volatilities on Zhejiang Construction 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 Zhejiang Construction with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Kweichow Moutai.
Diversification Opportunities for Zhejiang Construction and Kweichow Moutai
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhejiang and Kweichow is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Zhejiang Construction 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 Zhejiang Construction Investment 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 Zhejiang Construction i.e., Zhejiang Construction and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Kweichow Moutai
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Kweichow Moutai. In addition to that, Zhejiang Construction is 1.72 times more volatile than Kweichow Moutai Co. It trades about -0.37 of its total potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.27 per unit of volatility. If you would invest 153,882 in Kweichow Moutai Co on October 25, 2024 and sell it today you would lose (9,582) from holding Kweichow Moutai Co or give up 6.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Kweichow Moutai Co
Performance |
| Timeline |
| Zhejiang Construction |
| Kweichow Moutai |
Zhejiang Construction and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Kweichow Moutai
The main advantage of trading using opposite Zhejiang Construction and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction 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.| Zhejiang Construction vs. Agricultural Bank of | Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. China Construction Bank |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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