Correlation Between Kweichow Moutai and Fujian Oriental
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By analyzing existing cross correlation between Kweichow Moutai Co and Fujian Oriental Silver, you can compare the effects of market volatilities on Kweichow Moutai and Fujian Oriental 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 Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Fujian Oriental.
Diversification Opportunities for Kweichow Moutai and Fujian Oriental
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Fujian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver 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 Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Fujian Oriental go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Fujian Oriental
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.19 times more return on investment than Fujian Oriental. However, Kweichow Moutai Co is 5.32 times less risky than Fujian Oriental. It trades about -0.02 of its potential returns per unit of risk. Fujian Oriental Silver is currently generating about -0.15 per unit of risk. If you would invest 144,000 in Kweichow Moutai Co on November 7, 2024 and sell it today you would lose (501.00) from holding Kweichow Moutai Co or give up 0.35% 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. Fujian Oriental Silver
Performance |
| Timeline |
| Kweichow Moutai |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fujian Oriental Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kweichow Moutai and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Fujian Oriental
The main advantage of trading using opposite Kweichow Moutai and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.The idea behind Kweichow Moutai Co and Fujian Oriental Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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