Correlation Between Kweichow Moutai and Tongyu Communication
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By analyzing existing cross correlation between Kweichow Moutai Co and Tongyu Communication, you can compare the effects of market volatilities on Kweichow Moutai and Tongyu Communication 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 Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Tongyu Communication.
Diversification Opportunities for Kweichow Moutai and Tongyu Communication
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Tongyu is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication 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 Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Tongyu Communication go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Tongyu Communication
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Tongyu Communication. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 3.52 times less risky than Tongyu Communication. The stock trades about -0.1 of its potential returns per unit of risk. The Tongyu Communication is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,390 in Tongyu Communication on August 29, 2024 and sell it today you would earn a total of 320.00 from holding Tongyu Communication or generate 23.02% 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. Tongyu Communication
Performance |
| Timeline |
| Kweichow Moutai |
| Tongyu Communication |
Kweichow Moutai and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Tongyu Communication
The main advantage of trading using opposite Kweichow Moutai and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| Kweichow Moutai vs. PetroChina Co Ltd | Kweichow Moutai vs. China Mobile Limited | Kweichow Moutai vs. Ping An Insurance | Kweichow Moutai vs. China Petroleum Chemical |
| Tongyu Communication vs. China State Construction | Tongyu Communication vs. Huafa Industrial Co | Tongyu Communication vs. China International Capital | Tongyu Communication vs. Kweichow Moutai 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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