Correlation Between Kweichow Moutai and Changjiang Jinggong
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By analyzing existing cross correlation between Kweichow Moutai Co and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Kweichow Moutai and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Changjiang Jinggong.
Diversification Opportunities for Kweichow Moutai and Changjiang Jinggong
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Changjiang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Changjiang Jinggong
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Changjiang Jinggong. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.06 times less risky than Changjiang Jinggong. The stock trades about -0.14 of its potential returns per unit of risk. The Changjiang Jinggong Steel is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Changjiang Jinggong Steel on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Changjiang Jinggong Steel or generate 1.38% 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. Changjiang Jinggong Steel
Performance |
| Timeline |
| Kweichow Moutai |
| Changjiang Jinggong Steel |
Kweichow Moutai and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Changjiang Jinggong
The main advantage of trading using opposite Kweichow Moutai and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Kweichow Moutai vs. Shanghai Rongtai Health | Kweichow Moutai vs. Heren Health Co | Kweichow Moutai vs. De Rucci Healthy | Kweichow Moutai vs. Shandong Sanyuan Biotechnology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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