Correlation Between Kweichow Moutai and Huaxia Eye
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By analyzing existing cross correlation between Kweichow Moutai Co and Huaxia Eye Hospital, you can compare the effects of market volatilities on Kweichow Moutai and Huaxia Eye 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 Huaxia Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Huaxia Eye.
Diversification Opportunities for Kweichow Moutai and Huaxia Eye
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Huaxia is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Huaxia Eye Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaxia Eye Hospital 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 Huaxia Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaxia Eye Hospital has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Huaxia Eye go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Huaxia Eye
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.89 times more return on investment than Huaxia Eye. However, Kweichow Moutai Co is 1.13 times less risky than Huaxia Eye. It trades about -0.02 of its potential returns per unit of risk. Huaxia Eye Hospital is currently generating about -0.17 per unit of risk. If you would invest 144,000 in Kweichow Moutai Co on November 7, 2024 and sell it today you would lose (501.00) from holding Kweichow Moutai Co or give up 0.35% 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. Huaxia Eye Hospital
Performance |
| Timeline |
| Kweichow Moutai |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huaxia Eye Hospital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kweichow Moutai and Huaxia Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Huaxia Eye
The main advantage of trading using opposite Kweichow Moutai and Huaxia Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Huaxia Eye 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 Huaxia Eye will offset losses from the drop in Huaxia Eye's long position.The idea behind Kweichow Moutai Co and Huaxia Eye Hospital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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