Correlation Between Long Yuan and Kweichow Moutai
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By analyzing existing cross correlation between Long Yuan Construction and Kweichow Moutai Co, you can compare the effects of market volatilities on Long Yuan 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 Long Yuan with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Kweichow Moutai.
Diversification Opportunities for Long Yuan and Kweichow Moutai
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Long and Kweichow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Long Yuan 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 Long Yuan Construction 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 Long Yuan i.e., Long Yuan and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Long Yuan and Kweichow Moutai
Assuming the 90 days trading horizon Long Yuan Construction is expected to generate 2.48 times more return on investment than Kweichow Moutai. However, Long Yuan is 2.48 times more volatile than Kweichow Moutai Co. It trades about 0.06 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.14 per unit of risk. If you would invest 412.00 in Long Yuan Construction on September 15, 2024 and sell it today you would earn a total of 11.00 from holding Long Yuan Construction or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Kweichow Moutai Co
Performance |
| Timeline |
| Long Yuan Construction |
| Kweichow Moutai |
Long Yuan and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Kweichow Moutai
The main advantage of trading using opposite Long Yuan and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan 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.| Long Yuan vs. Zhejiang Yayi Metal | Long Yuan vs. Nanjing OLO Home | Long Yuan vs. Oppein Home Group | Long Yuan vs. Sino Platinum Metals Co |
| Kweichow Moutai vs. Huasi Agricultural Development | Kweichow Moutai vs. Long Yuan Construction | Kweichow Moutai vs. Xingguang Agricultural Mach | Kweichow Moutai vs. Zhongzhu Medical Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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