Correlation Between Kweichow Moutai and China National
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By analyzing existing cross correlation between Kweichow Moutai Co and China National Software, you can compare the effects of market volatilities on Kweichow Moutai and China National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and China National.
Diversification Opportunities for Kweichow Moutai and China National
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and China is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and China National go up and down completely randomly.
Pair Corralation between Kweichow Moutai and China National
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.41 times more return on investment than China National. However, Kweichow Moutai Co is 2.43 times less risky than China National. It trades about -0.26 of its potential returns per unit of risk. China National Software is currently generating about -0.15 per unit of risk. If you would invest 152,500 in Kweichow Moutai Co on October 29, 2024 and sell it today you would lose (8,900) from holding Kweichow Moutai Co or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. China National Software
Performance |
| Timeline |
| Kweichow Moutai |
| China National Software |
Kweichow Moutai and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and China National
The main advantage of trading using opposite Kweichow Moutai and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, China National 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 National will offset losses from the drop in China National's long position.| Kweichow Moutai vs. Do Fluoride Chemicals Co | Kweichow Moutai vs. Porton Fine Chemicals | Kweichow Moutai vs. Guangzhou Zhujiang Brewery | Kweichow Moutai vs. Guangdong Wens Foodstuff |
| China National vs. Bank of China | China National vs. Kweichow Moutai Co | China National vs. PetroChina Co Ltd | China National vs. Bank of Communications |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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