Correlation Between Kweichow Moutai and New China
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By analyzing existing cross correlation between Kweichow Moutai Co and New China Life, you can compare the effects of market volatilities on Kweichow Moutai and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and New China.
Diversification Opportunities for Kweichow Moutai and New China
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kweichow and New is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and New China go up and down completely randomly.
Pair Corralation between Kweichow Moutai and New China
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the New China. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.54 times less risky than New China. The stock trades about -0.01 of its potential returns per unit of risk. The New China Life is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,117 in New China Life on September 26, 2024 and sell it today you would earn a total of 2,013 from holding New China Life or generate 64.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. New China Life
Performance |
| Timeline |
| Kweichow Moutai |
| New China Life |
Kweichow Moutai and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and New China
The main advantage of trading using opposite Kweichow Moutai and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Kweichow Moutai vs. PetroChina Co Ltd | Kweichow Moutai vs. China Mobile Limited | Kweichow Moutai vs. CNOOC Limited | Kweichow Moutai vs. Ping An Insurance |
| New China vs. Kuangda Technology Group | New China vs. Keeson Technology Corp | New China vs. Focus Media Information | New China vs. China Life Insurance |
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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