Correlation Between Kweichow Moutai and Yili Chuanning
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By analyzing existing cross correlation between Kweichow Moutai Co and Yili Chuanning Biotechnology, you can compare the effects of market volatilities on Kweichow Moutai and Yili Chuanning 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 Yili Chuanning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Yili Chuanning.
Diversification Opportunities for Kweichow Moutai and Yili Chuanning
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Yili is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Yili Chuanning Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yili Chuanning Biote 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 Yili Chuanning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yili Chuanning Biote has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Yili Chuanning go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Yili Chuanning
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.63 times more return on investment than Yili Chuanning. However, Kweichow Moutai Co is 1.59 times less risky than Yili Chuanning. It trades about -0.04 of its potential returns per unit of risk. Yili Chuanning Biotechnology is currently generating about -0.22 per unit of risk. If you would invest 154,820 in Kweichow Moutai Co on September 5, 2024 and sell it today you would lose (2,146) from holding Kweichow Moutai Co or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Yili Chuanning Biotechnology
Performance |
| Timeline |
| Kweichow Moutai |
| Yili Chuanning Biote |
Kweichow Moutai and Yili Chuanning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Yili Chuanning
The main advantage of trading using opposite Kweichow Moutai and Yili Chuanning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Yili Chuanning 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 Yili Chuanning will offset losses from the drop in Yili Chuanning's long position.| Kweichow Moutai vs. Xiangtan Electrochemical Scientific | Kweichow Moutai vs. North Huajin Chemical | Kweichow Moutai vs. Xinjiang Zhongtai Chemical | Kweichow Moutai vs. Shenzhen SDG Information |
| Yili Chuanning vs. Kweichow Moutai Co | Yili Chuanning vs. Shenzhen Mindray Bio Medical | Yili Chuanning vs. Jiangsu Pacific Quartz | Yili Chuanning 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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