Correlation Between Kweichow Moutai and China Merchants
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By analyzing existing cross correlation between Kweichow Moutai Co and China Merchants Bank, you can compare the effects of market volatilities on Kweichow Moutai and China Merchants 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 China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and China Merchants.
Diversification Opportunities for Kweichow Moutai and China Merchants
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kweichow and China is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank 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 China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and China Merchants go up and down completely randomly.
Pair Corralation between Kweichow Moutai and China Merchants
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the China Merchants. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.12 times less risky than China Merchants. The stock trades about -0.07 of its potential returns per unit of risk. The China Merchants Bank is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,622 in China Merchants Bank on October 26, 2024 and sell it today you would earn a total of 361.00 from holding China Merchants Bank or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. China Merchants Bank
Performance |
| Timeline |
| Kweichow Moutai |
| China Merchants Bank |
Kweichow Moutai and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and China Merchants
The main advantage of trading using opposite Kweichow Moutai and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| Kweichow Moutai vs. Cultural Investment Holdings | Kweichow Moutai vs. Jiangsu Yueda Investment | Kweichow Moutai vs. Beijing Jiaman Dress | Kweichow Moutai vs. Henan Shuanghui Investment |
| China Merchants vs. Rising Nonferrous Metals | China Merchants vs. Anhui Transport Consulting | China Merchants vs. Zhonghong Pulin Medical | China Merchants vs. Sino Platinum Metals Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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