Correlation Between Kweichow Moutai and Tianshan Aluminum
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By analyzing existing cross correlation between Kweichow Moutai Co and Tianshan Aluminum Group, you can compare the effects of market volatilities on Kweichow Moutai and Tianshan Aluminum 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 Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Tianshan Aluminum.
Diversification Opportunities for Kweichow Moutai and Tianshan Aluminum
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Tianshan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum 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 Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Tianshan Aluminum
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Tianshan Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.46 times less risky than Tianshan Aluminum. The stock trades about -0.22 of its potential returns per unit of risk. The Tianshan Aluminum Group is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 845.00 in Tianshan Aluminum Group on October 15, 2024 and sell it today you would lose (25.00) from holding Tianshan Aluminum Group or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Tianshan Aluminum Group
Performance |
| Timeline |
| Kweichow Moutai |
| Tianshan Aluminum |
Kweichow Moutai and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Tianshan Aluminum
The main advantage of trading using opposite Kweichow Moutai and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Tianshan Aluminum 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.| Kweichow Moutai vs. Beijing Kingsoft Office | Kweichow Moutai vs. Guangzhou Haige Communications | Kweichow Moutai vs. Dynagreen Environmental Protection | Kweichow Moutai vs. Songz Automobile Air |
| Tianshan Aluminum vs. Sportsoul Co Ltd | Tianshan Aluminum vs. Huaibei Mining Holdings | Tianshan Aluminum vs. Western Mining Co | Tianshan Aluminum vs. Shenyang Blue Silver |
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