Correlation Between Kweichow Moutai and Weihai Honglin
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By analyzing existing cross correlation between Kweichow Moutai Co and Weihai Honglin Electronic, you can compare the effects of market volatilities on Kweichow Moutai and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Weihai Honglin.
Diversification Opportunities for Kweichow Moutai and Weihai Honglin
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Weihai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Weihai Honglin go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Weihai Honglin
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.75 times more return on investment than Weihai Honglin. However, Kweichow Moutai Co is 1.32 times less risky than Weihai Honglin. It trades about -0.1 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about -0.18 per unit of risk. If you would invest 156,500 in Kweichow Moutai Co on August 29, 2024 and sell it today you would lose (5,600) from holding Kweichow Moutai Co or give up 3.58% 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. Weihai Honglin Electronic
Performance |
| Timeline |
| Kweichow Moutai |
| Weihai Honglin Electronic |
Kweichow Moutai and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Weihai Honglin
The main advantage of trading using opposite Kweichow Moutai and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Kweichow Moutai vs. Huafa Industrial Co | Kweichow Moutai vs. Xinjiang Baodi Mining | Kweichow Moutai vs. Guangzhou Haozhi Industrial | Kweichow Moutai vs. Hainan Mining Co |
| Weihai Honglin vs. Kweichow Moutai Co | Weihai Honglin vs. Shenzhen Mindray Bio Medical | Weihai Honglin vs. Jiangsu Pacific Quartz | Weihai Honglin 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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