Correlation Between Kweichow Moutai and Guangzhou Zhujiang
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By analyzing existing cross correlation between Kweichow Moutai Co and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Kweichow Moutai and Guangzhou Zhujiang 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 Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Guangzhou Zhujiang.
Diversification Opportunities for Kweichow Moutai and Guangzhou Zhujiang
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Guangzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang 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 Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Guangzhou Zhujiang
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 1.14 times more return on investment than Guangzhou Zhujiang. However, Kweichow Moutai is 1.14 times more volatile than Guangzhou Zhujiang Brewery. It trades about 0.15 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.14 per unit of risk. If you would invest 126,690 in Kweichow Moutai Co on September 14, 2024 and sell it today you would earn a total of 29,890 from holding Kweichow Moutai Co or generate 23.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| Kweichow Moutai |
| Guangzhou Zhujiang |
Kweichow Moutai and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Guangzhou Zhujiang
The main advantage of trading using opposite Kweichow Moutai and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| Kweichow Moutai vs. China Life Insurance | Kweichow Moutai vs. Cinda Securities Co | Kweichow Moutai vs. Piotech Inc A | Kweichow Moutai vs. Dongxing Sec Co |
| Guangzhou Zhujiang vs. Industrial and Commercial | Guangzhou Zhujiang vs. Kweichow Moutai Co | Guangzhou Zhujiang vs. Agricultural Bank of | Guangzhou Zhujiang vs. China Mobile Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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