Correlation Between Kweichow Moutai and China Enterprise
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By analyzing existing cross correlation between Kweichow Moutai Co and China Enterprise Co, you can compare the effects of market volatilities on Kweichow Moutai and China Enterprise 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 Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and China Enterprise.
Diversification Opportunities for Kweichow Moutai and China Enterprise
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and China is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and China Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Enterprise 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 Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Enterprise has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and China Enterprise go up and down completely randomly.
Pair Corralation between Kweichow Moutai and China Enterprise
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.38 times more return on investment than China Enterprise. However, Kweichow Moutai Co is 2.63 times less risky than China Enterprise. It trades about 0.03 of its potential returns per unit of risk. China Enterprise Co is currently generating about -0.04 per unit of risk. If you would invest 151,905 in Kweichow Moutai Co on September 28, 2024 and sell it today you would earn a total of 874.00 from holding Kweichow Moutai Co or generate 0.58% 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. China Enterprise Co
Performance |
| Timeline |
| Kweichow Moutai |
| China Enterprise |
Kweichow Moutai and China Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and China Enterprise
The main advantage of trading using opposite Kweichow Moutai and China Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, China Enterprise 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 Enterprise will offset losses from the drop in China Enterprise's long position.| Kweichow Moutai vs. Chengtun Mining Group | Kweichow Moutai vs. Healthcare Co | Kweichow Moutai vs. Tibet Huayu Mining | Kweichow Moutai vs. Mingchen Health Co |
| China Enterprise vs. INKON Life Technology | China Enterprise vs. Chahua Modern Housewares | China Enterprise vs. Anhui Deli Household | China Enterprise vs. China World Trade |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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