Correlation Between Kweichow Moutai and Shandong Mining
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By analyzing existing cross correlation between Kweichow Moutai Co and Shandong Mining Machinery, you can compare the effects of market volatilities on Kweichow Moutai and Shandong Mining 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 Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Shandong Mining.
Diversification Opportunities for Kweichow Moutai and Shandong Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kweichow and Shandong is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery 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 Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Shandong Mining go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Shandong Mining
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Shandong Mining. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 2.02 times less risky than Shandong Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Shandong Mining Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 248.00 in Shandong Mining Machinery on October 25, 2024 and sell it today you would earn a total of 131.00 from holding Shandong Mining Machinery or generate 52.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Shandong Mining Machinery
Performance |
| Timeline |
| Kweichow Moutai |
| Shandong Mining Machinery |
Kweichow Moutai and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Shandong Mining
The main advantage of trading using opposite Kweichow Moutai and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Shandong Mining 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 Shandong Mining will offset losses from the drop in Shandong Mining's long position.| Kweichow Moutai vs. Southchip Semiconductor Technology | Kweichow Moutai vs. Yingde Greatchem Chemicals | Kweichow Moutai vs. Aba Chemicals Corp | Kweichow Moutai vs. Easyhome New Retail |
| Shandong Mining vs. Kweichow Moutai Co | Shandong Mining vs. Contemporary Amperex Technology | Shandong Mining vs. Beijing Roborock Technology | Shandong Mining vs. BYD Co Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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