Correlation Between Kweichow Moutai and Aerospace
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By analyzing existing cross correlation between Kweichow Moutai Co and Aerospace Hi Tech Holding, you can compare the effects of market volatilities on Kweichow Moutai and Aerospace 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 Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Aerospace.
Diversification Opportunities for Kweichow Moutai and Aerospace
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Aerospace is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Aerospace Hi Tech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerospace Hi Tech 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 Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerospace Hi Tech has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Aerospace go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Aerospace
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Aerospace. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.81 times less risky than Aerospace. The stock trades about -0.02 of its potential returns per unit of risk. The Aerospace Hi Tech Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 838.00 in Aerospace Hi Tech Holding on September 3, 2024 and sell it today you would earn a total of 355.00 from holding Aerospace Hi Tech Holding or generate 42.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Aerospace Hi Tech Holding
Performance |
| Timeline |
| Kweichow Moutai |
| Aerospace Hi Tech |
Kweichow Moutai and Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Aerospace
The main advantage of trading using opposite Kweichow Moutai and Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Aerospace 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 Aerospace will offset losses from the drop in Aerospace's long position.| Kweichow Moutai vs. China Railway Materials | Kweichow Moutai vs. Peoples Insurance of | Kweichow Moutai vs. Jinsanjiang Silicon Material | Kweichow Moutai vs. Guangdong Jingyi Metal |
| Aerospace vs. PetroChina Co Ltd | Aerospace vs. China Mobile Limited | Aerospace vs. Industrial and Commercial | Aerospace vs. China Life Insurance |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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