Correlation Between Shanghai Pudong and Kweichow Moutai
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By analyzing existing cross correlation between Shanghai Pudong Development and Kweichow Moutai Co, you can compare the effects of market volatilities on Shanghai Pudong 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 Shanghai Pudong with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Kweichow Moutai.
Diversification Opportunities for Shanghai Pudong and Kweichow Moutai
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Kweichow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Shanghai Pudong 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 Shanghai Pudong Development 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 Shanghai Pudong i.e., Shanghai Pudong and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Kweichow Moutai
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to generate 0.74 times more return on investment than Kweichow Moutai. However, Shanghai Pudong Development is 1.36 times less risky than Kweichow Moutai. It trades about 0.06 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about 0.0 per unit of risk. If you would invest 704.00 in Shanghai Pudong Development on August 26, 2024 and sell it today you would earn a total of 244.00 from holding Shanghai Pudong Development or generate 34.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Pudong Development vs. Kweichow Moutai Co
Performance |
Timeline |
Shanghai Pudong Deve |
Kweichow Moutai |
Shanghai Pudong and Kweichow Moutai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Pudong and Kweichow Moutai
The main advantage of trading using opposite Shanghai Pudong and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong 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.Shanghai Pudong vs. Fujian Longzhou Transportation | Shanghai Pudong vs. Tianshui Huatian Technology | Shanghai Pudong vs. Western Superconducting Tech | Shanghai Pudong vs. Saurer Intelligent Technology |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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