Correlation Between Kweichow Moutai and Guangzhou Automobile
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By analyzing existing cross correlation between Kweichow Moutai Co and Guangzhou Automobile Group, you can compare the effects of market volatilities on Kweichow Moutai and Guangzhou Automobile 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 Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Guangzhou Automobile.
Diversification Opportunities for Kweichow Moutai and Guangzhou Automobile
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Guangzhou is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile 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 Guangzhou Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Automobile has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Guangzhou Automobile
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.97 times more return on investment than Guangzhou Automobile. However, Kweichow Moutai Co is 1.03 times less risky than Guangzhou Automobile. It trades about 0.0 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.03 per unit of risk. If you would invest 163,802 in Kweichow Moutai Co on August 28, 2024 and sell it today you would lose (13,945) from holding Kweichow Moutai Co or give up 8.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Kweichow Moutai |
| Guangzhou Automobile |
Kweichow Moutai and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Guangzhou Automobile
The main advantage of trading using opposite Kweichow Moutai and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Guangzhou Automobile 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 Guangzhou Automobile will offset losses from the drop in Guangzhou Automobile's long position.| Kweichow Moutai vs. Xiangyang Automobile Bearing | Kweichow Moutai vs. Northking Information Technology | Kweichow Moutai vs. Niutech Environment Technology | Kweichow Moutai vs. Western Superconducting Tech |
| Guangzhou Automobile vs. Lutian Machinery Co | Guangzhou Automobile vs. China Longyuan Power | Guangzhou Automobile vs. Changshu Tongrun Auto | Guangzhou Automobile vs. PetroChina Co Ltd |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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