Correlation Between Kweichow Moutai and Guangzhou Restaurants
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By analyzing existing cross correlation between Kweichow Moutai Co and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Kweichow Moutai and Guangzhou Restaurants 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 Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Guangzhou Restaurants.
Diversification Opportunities for Kweichow Moutai and Guangzhou Restaurants
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 Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Guangzhou Restaurants
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Guangzhou Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 2.27 times less risky than Guangzhou Restaurants. The stock trades about -0.03 of its potential returns per unit of risk. The Guangzhou Restaurants Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,671 in Guangzhou Restaurants Group on September 14, 2024 and sell it today you would earn a total of 148.00 from holding Guangzhou Restaurants Group or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Kweichow Moutai |
| Guangzhou Restaurants |
Kweichow Moutai and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Guangzhou Restaurants
The main advantage of trading using opposite Kweichow Moutai and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Guangzhou Restaurants 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 Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Kweichow Moutai vs. China Life Insurance | Kweichow Moutai vs. Cinda Securities Co | Kweichow Moutai vs. Piotech Inc A | Kweichow Moutai vs. Dongxing Sec Co |
| Guangzhou Restaurants vs. Kweichow Moutai Co | Guangzhou Restaurants vs. Shenzhen Mindray Bio Medical | Guangzhou Restaurants vs. Jiangsu Pacific Quartz | Guangzhou Restaurants 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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