Correlation Between Kweichow Moutai and China Galaxy
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By analyzing existing cross correlation between Kweichow Moutai Co and China Galaxy Securities, you can compare the effects of market volatilities on Kweichow Moutai and China Galaxy 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 China Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and China Galaxy.
Diversification Opportunities for Kweichow Moutai and China Galaxy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and China Galaxy Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Galaxy Securities 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 China Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Galaxy Securities has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and China Galaxy go up and down completely randomly.
Pair Corralation between Kweichow Moutai and China Galaxy
Assuming the 90 days trading horizon Kweichow Moutai is expected to generate 5.07 times less return on investment than China Galaxy. But when comparing it to its historical volatility, Kweichow Moutai Co is 1.22 times less risky than China Galaxy. It trades about 0.03 of its potential returns per unit of risk. China Galaxy Securities is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,527 in China Galaxy Securities on September 28, 2024 and sell it today you would earn a total of 55.00 from holding China Galaxy Securities or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kweichow Moutai Co vs. China Galaxy Securities
Performance |
| Timeline |
| Kweichow Moutai |
| China Galaxy Securities |
Kweichow Moutai and China Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and China Galaxy
The main advantage of trading using opposite Kweichow Moutai and China Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, China Galaxy 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 China Galaxy will offset losses from the drop in China Galaxy's long position.| Kweichow Moutai vs. Chengtun Mining Group | Kweichow Moutai vs. Healthcare Co | Kweichow Moutai vs. Tibet Huayu Mining | Kweichow Moutai vs. Mingchen Health Co |
| China Galaxy vs. Kweichow Moutai Co | China Galaxy vs. Contemporary Amperex Technology | China Galaxy vs. G bits Network Technology | China Galaxy vs. BYD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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