Correlation Between Kweichow Moutai and Ningbo Fangzheng
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By analyzing existing cross correlation between Kweichow Moutai Co and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Kweichow Moutai and Ningbo Fangzheng 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 Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Ningbo Fangzheng.
Diversification Opportunities for Kweichow Moutai and Ningbo Fangzheng
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Ningbo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut 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 Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Ningbo Fangzheng
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 3.62 times less risky than Ningbo Fangzheng. The stock trades about -0.14 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,656 in Ningbo Fangzheng Automobile on September 13, 2024 and sell it today you would earn a total of 151.00 from holding Ningbo Fangzheng Automobile or generate 9.12% 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. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Kweichow Moutai |
| Ningbo Fangzheng Aut |
Kweichow Moutai and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Ningbo Fangzheng
The main advantage of trading using opposite Kweichow Moutai and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Kweichow Moutai vs. China Publishing Media | Kweichow Moutai vs. China Sports Industry | Kweichow Moutai vs. Shuhua Sports Co | Kweichow Moutai vs. Jiangsu Jinling Sports |
| Ningbo Fangzheng vs. BeiGene | Ningbo Fangzheng vs. Kweichow Moutai Co | Ningbo Fangzheng vs. Beijing Roborock Technology | Ningbo Fangzheng vs. G bits Network 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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