Correlation Between Kweichow Moutai and Chongqing Brewery
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By analyzing existing cross correlation between Kweichow Moutai Co and Chongqing Brewery Co, you can compare the effects of market volatilities on Kweichow Moutai and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Chongqing Brewery.
Diversification Opportunities for Kweichow Moutai and Chongqing Brewery
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Chongqing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Chongqing Brewery
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 1.1 times more return on investment than Chongqing Brewery. However, Kweichow Moutai is 1.1 times more volatile than Chongqing Brewery Co. It trades about 0.09 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.01 per unit of risk. If you would invest 143,499 in Kweichow Moutai Co on November 28, 2024 and sell it today you would earn a total of 2,502 from holding Kweichow Moutai Co or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.12% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Chongqing Brewery Co
Performance |
| Timeline |
| Kweichow Moutai |
| Chongqing Brewery |
Kweichow Moutai and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Chongqing Brewery
The main advantage of trading using opposite Kweichow Moutai and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Kweichow Moutai vs. Humanwell Healthcare Group | Kweichow Moutai vs. Heren Health Co | Kweichow Moutai vs. Meinian Onehealth Healthcare | Kweichow Moutai vs. Beijing Kingsoft Office |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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