Correlation Between Kweichow Moutai and Dongguan Tarry
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By analyzing existing cross correlation between Kweichow Moutai Co and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Kweichow Moutai and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Dongguan Tarry.
Diversification Opportunities for Kweichow Moutai and Dongguan Tarry
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Dongguan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Dongguan Tarry
Assuming the 90 days trading horizon Kweichow Moutai is expected to generate 10.62 times less return on investment than Dongguan Tarry. But when comparing it to its historical volatility, Kweichow Moutai Co is 1.93 times less risky than Dongguan Tarry. It trades about 0.02 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,405 in Dongguan Tarry Electronics on September 12, 2024 and sell it today you would earn a total of 1,897 from holding Dongguan Tarry Electronics or generate 43.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Kweichow Moutai |
| Dongguan Tarry Elect |
Kweichow Moutai and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Dongguan Tarry
The main advantage of trading using opposite Kweichow Moutai and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Kweichow Moutai vs. Luyin Investment Group | Kweichow Moutai vs. Sichuan Fulin Transportation | Kweichow Moutai vs. Zhongshan Broad Ocean Motor | Kweichow Moutai vs. Southchip Semiconductor Technology |
| Dongguan Tarry vs. Agricultural Bank of | Dongguan Tarry vs. Industrial and Commercial | Dongguan Tarry vs. Bank of China | Dongguan Tarry vs. PetroChina Co Ltd |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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