Correlation Between Kweichow Moutai and Shanghai Construction
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By analyzing existing cross correlation between Kweichow Moutai Co and Shanghai Construction Group, you can compare the effects of market volatilities on Kweichow Moutai and Shanghai Construction 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 Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Shanghai Construction.
Diversification Opportunities for Kweichow Moutai and Shanghai Construction
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Shanghai is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction 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 Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Shanghai Construction go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Shanghai Construction
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Shanghai Construction. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.07 times less risky than Shanghai Construction. The stock trades about -0.02 of its potential returns per unit of risk. The Shanghai Construction Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Shanghai Construction Group on August 27, 2024 and sell it today you would earn a total of 15.00 from holding Shanghai Construction Group or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Shanghai Construction Group
Performance |
| Timeline |
| Kweichow Moutai |
| Shanghai Construction |
Kweichow Moutai and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Shanghai Construction
The main advantage of trading using opposite Kweichow Moutai and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Shanghai Construction 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 Shanghai Construction will offset losses from the drop in Shanghai Construction's long position.| Kweichow Moutai vs. 360 Security Technology | Kweichow Moutai vs. Dezhan HealthCare Co | Kweichow Moutai vs. Youngy Health Co | Kweichow Moutai vs. Mingchen Health Co |
| Shanghai Construction vs. Ming Yang Smart | Shanghai Construction vs. 159681 | Shanghai Construction vs. 159005 | Shanghai Construction vs. Loctek Ergonomic 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 Stocks Directory module to find actively traded stocks across global markets.
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