Correlation Between Kweichow Moutai and Bank of Shanghai
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By analyzing existing cross correlation between Kweichow Moutai Co and Bank of Shanghai, you can compare the effects of market volatilities on Kweichow Moutai and Bank of Shanghai 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 Bank of Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Bank of Shanghai.
Diversification Opportunities for Kweichow Moutai and Bank of Shanghai
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Bank is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Bank of Shanghai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Shanghai 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 Bank of Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Shanghai has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Bank of Shanghai go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Bank of Shanghai
Assuming the 90 days trading horizon Kweichow Moutai is expected to generate 58.43 times less return on investment than Bank of Shanghai. But when comparing it to its historical volatility, Kweichow Moutai Co is 1.03 times less risky than Bank of Shanghai. It trades about 0.0 of its potential returns per unit of risk. Bank of Shanghai is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Bank of Shanghai on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Bank of Shanghai or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Bank of Shanghai
Performance |
| Timeline |
| Kweichow Moutai |
| Bank of Shanghai |
Kweichow Moutai and Bank of Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Bank of Shanghai
The main advantage of trading using opposite Kweichow Moutai and Bank of Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Bank of Shanghai 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 Bank of Shanghai will offset losses from the drop in Bank of Shanghai's long position.| Kweichow Moutai vs. Shenzhen Glory Medical | Kweichow Moutai vs. Qingdao Haier Biomedical | Kweichow Moutai vs. Winner Medical Co | Kweichow Moutai vs. Anhui Jianghuai Automobile |
| Bank of Shanghai vs. Kweichow Moutai Co | Bank of Shanghai vs. Shenzhen Mindray Bio Medical | Bank of Shanghai vs. Jiangsu Pacific Quartz | Bank of Shanghai vs. G bits Network Technology |
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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