Correlation Between Kweichow Moutai and Rongcheer Industrial
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By analyzing existing cross correlation between Kweichow Moutai Co and Rongcheer Industrial Technology, you can compare the effects of market volatilities on Kweichow Moutai and Rongcheer Industrial 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 Rongcheer Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Rongcheer Industrial.
Diversification Opportunities for Kweichow Moutai and Rongcheer Industrial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Rongcheer is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Rongcheer Industrial Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongcheer Industrial 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 Rongcheer Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongcheer Industrial has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Rongcheer Industrial go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Rongcheer Industrial
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Rongcheer Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 3.56 times less risky than Rongcheer Industrial. The stock trades about -0.14 of its potential returns per unit of risk. The Rongcheer Industrial Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,752 in Rongcheer Industrial Technology on September 13, 2024 and sell it today you would earn a total of 158.00 from holding Rongcheer Industrial Technology or generate 2.75% 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. Rongcheer Industrial Technolog
Performance |
| Timeline |
| Kweichow Moutai |
| Rongcheer Industrial |
Kweichow Moutai and Rongcheer Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Rongcheer Industrial
The main advantage of trading using opposite Kweichow Moutai and Rongcheer Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Rongcheer Industrial 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 Rongcheer Industrial will offset losses from the drop in Rongcheer Industrial'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 |
| Rongcheer Industrial vs. Industrial and Commercial | Rongcheer Industrial vs. Kweichow Moutai Co | Rongcheer Industrial vs. Agricultural Bank of | Rongcheer Industrial vs. China Mobile Limited |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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