Correlation Between Kweichow Moutai and Qingdao Foods
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By analyzing existing cross correlation between Kweichow Moutai Co and Qingdao Foods Co, you can compare the effects of market volatilities on Kweichow Moutai and Qingdao Foods 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 Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Qingdao Foods.
Diversification Opportunities for Kweichow Moutai and Qingdao Foods
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kweichow and Qingdao is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods 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 Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Qingdao Foods go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Qingdao Foods
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Qingdao Foods. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 2.17 times less risky than Qingdao Foods. The stock trades about -0.11 of its potential returns per unit of risk. The Qingdao Foods Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Qingdao Foods Co on November 6, 2024 and sell it today you would lose (145.00) from holding Qingdao Foods Co or give up 9.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Qingdao Foods Co
Performance |
| Timeline |
| Kweichow Moutai |
| Qingdao Foods |
Kweichow Moutai and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Qingdao Foods
The main advantage of trading using opposite Kweichow Moutai and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| Kweichow Moutai vs. Juneyao Airlines | Kweichow Moutai vs. DO Home Collection | Kweichow Moutai vs. Zhangjiagang Elegant Home | Kweichow Moutai vs. Hongrun Construction Group |
| Qingdao Foods vs. Xilong Chemical Co | Qingdao Foods vs. Jiugui Liquor Co | Qingdao Foods vs. Xinxiang Chemical Fiber | Qingdao Foods vs. Jilin Jlu Communication |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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