Correlation Between Kweichow Moutai and Jinlong Machinery
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By analyzing existing cross correlation between Kweichow Moutai Co and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Kweichow Moutai and Jinlong Machinery 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 Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Jinlong Machinery.
Diversification Opportunities for Kweichow Moutai and Jinlong Machinery
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Jinlong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong 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 Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Jinlong Machinery
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Jinlong Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 2.5 times less risky than Jinlong Machinery. The stock trades about -0.02 of its potential returns per unit of risk. The Jinlong Machinery Electronic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 542.00 in Jinlong Machinery Electronic on October 25, 2024 and sell it today you would lose (110.00) from holding Jinlong Machinery Electronic or give up 20.3% 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. Jinlong Machinery Electronic
Performance |
| Timeline |
| Kweichow Moutai |
| Jinlong Machinery |
Kweichow Moutai and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Jinlong Machinery
The main advantage of trading using opposite Kweichow Moutai and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| Kweichow Moutai vs. Cultural Investment Holdings | Kweichow Moutai vs. Jiangsu Yueda Investment | Kweichow Moutai vs. Beijing Jiaman Dress | Kweichow Moutai vs. Henan Shuanghui Investment |
| Jinlong Machinery vs. China State Construction | Jinlong Machinery vs. Poly Real Estate | Jinlong Machinery vs. China Vanke Co | Jinlong Machinery vs. China Merchants Shekou |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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