Correlation Between Kweichow Moutai and Central China
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By analyzing existing cross correlation between Kweichow Moutai Co and Central China Land, you can compare the effects of market volatilities on Kweichow Moutai and Central China 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 Central China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Central China.
Diversification Opportunities for Kweichow Moutai and Central China
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Central is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Central China Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central China Land 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 Central China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central China Land has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Central China go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Central China
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.63 times more return on investment than Central China. However, Kweichow Moutai Co is 1.58 times less risky than Central China. It trades about -0.1 of its potential returns per unit of risk. Central China Land is currently generating about -0.14 per unit of risk. If you would invest 156,500 in Kweichow Moutai Co on August 29, 2024 and sell it today you would lose (5,600) from holding Kweichow Moutai Co or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Central China Land
Performance |
| Timeline |
| Kweichow Moutai |
| Central China Land |
Kweichow Moutai and Central China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Central China
The main advantage of trading using opposite Kweichow Moutai and Central China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Central China 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 Central China will offset losses from the drop in Central China's long position.| Kweichow Moutai vs. PetroChina Co Ltd | Kweichow Moutai vs. China Mobile Limited | Kweichow Moutai vs. Ping An Insurance | Kweichow Moutai vs. China Petroleum Chemical |
| Central China vs. Industrial and Commercial | Central China vs. Agricultural Bank of | Central China vs. China Construction Bank | Central China vs. Bank of China |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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