Correlation Between Kweichow Moutai and Luzhou Lao
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By analyzing existing cross correlation between Kweichow Moutai Co and Luzhou Lao Jiao, you can compare the effects of market volatilities on Kweichow Moutai and Luzhou Lao 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 Kweichow Moutai with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Luzhou Lao.
Diversification Opportunities for Kweichow Moutai and Luzhou Lao
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kweichow and Luzhou is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Kweichow Moutai 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 Kweichow Moutai Co are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Luzhou Lao go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Luzhou Lao
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.67 times more return on investment than Luzhou Lao. However, Kweichow Moutai Co is 1.5 times less risky than Luzhou Lao. It trades about -0.03 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about -0.04 per unit of risk. If you would invest 177,471 in Kweichow Moutai Co on August 25, 2024 and sell it today you would lose (26,689) from holding Kweichow Moutai Co or give up 15.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Kweichow Moutai |
| Luzhou Lao Jiao |
Kweichow Moutai and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Luzhou Lao
The main advantage of trading using opposite Kweichow Moutai and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Kweichow Moutai vs. State Grid InformationCommunication | Kweichow Moutai vs. CICT Mobile Communication | Kweichow Moutai vs. Western Mining Co | Kweichow Moutai vs. Allwin Telecommunication Co |
| Luzhou Lao vs. Shenzhen Clou Electronics | Luzhou Lao vs. Sichuan Fulin Transportation | Luzhou Lao vs. China Sports Industry | Luzhou Lao vs. Leaguer Shenzhen MicroElectronics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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