Correlation Between China Sports and Kweichow Moutai
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By analyzing existing cross correlation between China Sports Industry and Kweichow Moutai Co, you can compare the effects of market volatilities on China Sports 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 China Sports with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Kweichow Moutai.
Diversification Opportunities for China Sports and Kweichow Moutai
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Kweichow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and China Sports 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 China Sports Industry 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 China Sports i.e., China Sports and Kweichow Moutai go up and down completely randomly.
Pair Corralation between China Sports and Kweichow Moutai
Assuming the 90 days trading horizon China Sports Industry is expected to generate 1.39 times more return on investment than Kweichow Moutai. However, China Sports is 1.39 times more volatile than Kweichow Moutai Co. It trades about 0.16 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.06 per unit of risk. If you would invest 780.00 in China Sports Industry on September 13, 2024 and sell it today you would earn a total of 111.00 from holding China Sports Industry or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Sports Industry vs. Kweichow Moutai Co
Performance |
| Timeline |
| China Sports Industry |
| Kweichow Moutai |
China Sports and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Sports and Kweichow Moutai
The main advantage of trading using opposite China Sports and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports 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.| China Sports vs. China Life Insurance | China Sports vs. Cinda Securities Co | China Sports vs. Piotech Inc A | China Sports vs. Dongxing Sec Co |
| Kweichow Moutai vs. China Publishing Media | Kweichow Moutai vs. China Sports Industry | Kweichow Moutai vs. Shuhua Sports Co | Kweichow Moutai vs. Jiangsu Jinling Sports |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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