Correlation Between Kweichow Moutai and Northern United
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By analyzing existing cross correlation between Kweichow Moutai Co and Northern United Publishing, you can compare the effects of market volatilities on Kweichow Moutai and Northern United 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 Northern United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Northern United.
Diversification Opportunities for Kweichow Moutai and Northern United
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kweichow and Northern is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Northern United Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern United Publ 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 Northern United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern United Publ has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Northern United go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Northern United
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Northern United. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.8 times less risky than Northern United. The stock trades about -0.03 of its potential returns per unit of risk. The Northern United Publishing is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 727.00 in Northern United Publishing on November 9, 2024 and sell it today you would lose (59.00) from holding Northern United Publishing or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Northern United Publishing
Performance |
| Timeline |
| Kweichow Moutai |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Northern United Publ |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Kweichow Moutai and Northern United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Northern United
The main advantage of trading using opposite Kweichow Moutai and Northern United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Northern United 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 Northern United will offset losses from the drop in Northern United's long position.The idea behind Kweichow Moutai Co and Northern United Publishing 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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