Correlation Between Kweichow Moutai and Dalian Thermal
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By analyzing existing cross correlation between Kweichow Moutai Co and Dalian Thermal Power, you can compare the effects of market volatilities on Kweichow Moutai and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Dalian Thermal.
Diversification Opportunities for Kweichow Moutai and Dalian Thermal
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Dalian is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Dalian Thermal go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Dalian Thermal
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Dalian Thermal. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 2.55 times less risky than Dalian Thermal. The stock trades about -0.01 of its potential returns per unit of risk. The Dalian Thermal Power is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 456.00 in Dalian Thermal Power on August 31, 2024 and sell it today you would earn a total of 349.00 from holding Dalian Thermal Power or generate 76.54% 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. Dalian Thermal Power
Performance |
| Timeline |
| Kweichow Moutai |
| Dalian Thermal Power |
Kweichow Moutai and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Dalian Thermal
The main advantage of trading using opposite Kweichow Moutai and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Kweichow Moutai vs. Changchun Engley Automobile | Kweichow Moutai vs. Fiberhome Telecommunication Technologies | Kweichow Moutai vs. Shandong Longquan Pipeline | Kweichow Moutai vs. Western Mining Co |
| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Kweichow Moutai Co | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Mobile Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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