Correlation Between Kweichow Moutai and Zhangzhou Pientzehuang
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By analyzing existing cross correlation between Kweichow Moutai Co and Zhangzhou Pientzehuang Pharmaceutical, you can compare the effects of market volatilities on Kweichow Moutai and Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Zhangzhou Pientzehuang.
Diversification Opportunities for Kweichow Moutai and Zhangzhou Pientzehuang
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kweichow and Zhangzhou is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Zhangzhou Pientzehuang Pharmac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangzhou Pientzehuang has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Zhangzhou Pientzehuang go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Zhangzhou Pientzehuang
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Zhangzhou Pientzehuang. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.09 times less risky than Zhangzhou Pientzehuang. The stock trades about -0.02 of its potential returns per unit of risk. The Zhangzhou Pientzehuang Pharmaceutical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 22,284 in Zhangzhou Pientzehuang Pharmaceutical on September 3, 2024 and sell it today you would earn a total of 1,027 from holding Zhangzhou Pientzehuang Pharmaceutical or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Zhangzhou Pientzehuang Pharmac
Performance |
| Timeline |
| Kweichow Moutai |
| Zhangzhou Pientzehuang |
Kweichow Moutai and Zhangzhou Pientzehuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Zhangzhou Pientzehuang
The main advantage of trading using opposite Kweichow Moutai and Zhangzhou Pientzehuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang will offset losses from the drop in Zhangzhou Pientzehuang's long position.| Kweichow Moutai vs. China Railway Materials | Kweichow Moutai vs. Peoples Insurance of | Kweichow Moutai vs. Jinsanjiang Silicon Material | Kweichow Moutai vs. Guangdong Jingyi Metal |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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