Correlation Between Kweichow Moutai and Fujian Newland
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By analyzing existing cross correlation between Kweichow Moutai Co and Fujian Newland Computer, you can compare the effects of market volatilities on Kweichow Moutai and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Fujian Newland.
Diversification Opportunities for Kweichow Moutai and Fujian Newland
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kweichow and Fujian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Fujian Newland go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Fujian Newland
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Fujian Newland. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.66 times less risky than Fujian Newland. The stock trades about -0.1 of its potential returns per unit of risk. The Fujian Newland Computer is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,792 in Fujian Newland Computer on November 8, 2024 and sell it today you would earn a total of 261.00 from holding Fujian Newland Computer or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Fujian Newland Computer
Performance |
| Timeline |
| Kweichow Moutai |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fujian Newland Computer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Kweichow Moutai and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Fujian Newland
The main advantage of trading using opposite Kweichow Moutai and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.The idea behind Kweichow Moutai Co and Fujian Newland Computer pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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