Correlation Between Kweichow Moutai and Changchun
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By analyzing existing cross correlation between Kweichow Moutai Co and Changchun UP Optotech, you can compare the effects of market volatilities on Kweichow Moutai and Changchun 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 Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Changchun.
Diversification Opportunities for Kweichow Moutai and Changchun
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Changchun is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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 Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Changchun go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Changchun
Assuming the 90 days trading horizon Kweichow Moutai is expected to generate 3.8 times less return on investment than Changchun. But when comparing it to its historical volatility, Kweichow Moutai Co is 1.6 times less risky than Changchun. It trades about 0.1 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,486 in Changchun UP Optotech on September 12, 2024 and sell it today you would earn a total of 1,847 from holding Changchun UP Optotech or generate 74.3% 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. Changchun UP Optotech
Performance |
| Timeline |
| Kweichow Moutai |
| Changchun UP Optotech |
Kweichow Moutai and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Changchun
The main advantage of trading using opposite Kweichow Moutai and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Kweichow Moutai vs. China Publishing Media | Kweichow Moutai vs. China Sports Industry | Kweichow Moutai vs. Shuhua Sports Co | Kweichow Moutai vs. Jiangsu Jinling Sports |
| Changchun vs. China Life Insurance | Changchun vs. Cinda Securities Co | Changchun vs. Piotech Inc A | Changchun vs. Dongxing Sec Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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