Correlation Between Kweichow Moutai and GuoChuang Software
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By analyzing existing cross correlation between Kweichow Moutai Co and GuoChuang Software Co, you can compare the effects of market volatilities on Kweichow Moutai and GuoChuang Software 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 GuoChuang Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and GuoChuang Software.
Diversification Opportunities for Kweichow Moutai and GuoChuang Software
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and GuoChuang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and GuoChuang Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GuoChuang Software 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 GuoChuang Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GuoChuang Software has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and GuoChuang Software go up and down completely randomly.
Pair Corralation between Kweichow Moutai and GuoChuang Software
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the GuoChuang Software. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 2.64 times less risky than GuoChuang Software. The stock trades about -0.01 of its potential returns per unit of risk. The GuoChuang Software Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,685 in GuoChuang Software Co on September 2, 2024 and sell it today you would earn a total of 886.00 from holding GuoChuang Software Co or generate 52.58% 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. GuoChuang Software Co
Performance |
| Timeline |
| Kweichow Moutai |
| GuoChuang Software |
Kweichow Moutai and GuoChuang Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and GuoChuang Software
The main advantage of trading using opposite Kweichow Moutai and GuoChuang Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, GuoChuang Software 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 GuoChuang Software will offset losses from the drop in GuoChuang Software's long position.| Kweichow Moutai vs. Caihong Display Devices | Kweichow Moutai vs. Ningxia Building Materials | Kweichow Moutai vs. Guangzhou Tinci Materials | Kweichow Moutai vs. Cultural Investment Holdings |
| GuoChuang Software vs. Ming Yang Smart | GuoChuang Software vs. 159681 | GuoChuang Software vs. 159005 | GuoChuang Software vs. Loctek Ergonomic Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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