Correlation Between Kweichow Moutai and Penghua Shenzhen
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By analyzing existing cross correlation between Kweichow Moutai Co and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Kweichow Moutai and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Penghua Shenzhen.
Diversification Opportunities for Kweichow Moutai and Penghua Shenzhen
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kweichow and Penghua is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Penghua Shenzhen
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 4.18 times more return on investment than Penghua Shenzhen. However, Kweichow Moutai is 4.18 times more volatile than Penghua Shenzhen Energy. It trades about 0.02 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.05 per unit of risk. If you would invest 141,000 in Kweichow Moutai Co on November 2, 2024 and sell it today you would earn a total of 2,499 from holding Kweichow Moutai Co or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Kweichow Moutai |
| Penghua Shenzhen Energy |
Kweichow Moutai and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Penghua Shenzhen
The main advantage of trading using opposite Kweichow Moutai and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.| Kweichow Moutai vs. Xiwang Foodstuffs Co | Kweichow Moutai vs. Anji Foodstuff Co | Kweichow Moutai vs. Kidswant Children Products | Kweichow Moutai vs. Beingmate Baby Child |
| Penghua Shenzhen vs. Industrial and Commercial | Penghua Shenzhen vs. Kweichow Moutai Co | Penghua Shenzhen vs. Agricultural Bank of | Penghua Shenzhen 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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