Correlation Between Kweichow Moutai and Mengtian Home
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By analyzing existing cross correlation between Kweichow Moutai Co and Mengtian Home Group, you can compare the effects of market volatilities on Kweichow Moutai and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Mengtian Home.
Diversification Opportunities for Kweichow Moutai and Mengtian Home
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and Mengtian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Mengtian Home go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Mengtian Home
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Mengtian Home. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.61 times less risky than Mengtian Home. The stock trades about -0.02 of its potential returns per unit of risk. The Mengtian Home Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,271 in Mengtian Home Group on September 2, 2024 and sell it today you would lose (176.00) from holding Mengtian Home Group or give up 13.85% 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. Mengtian Home Group
Performance |
| Timeline |
| Kweichow Moutai |
| Mengtian Home Group |
Kweichow Moutai and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Mengtian Home
The main advantage of trading using opposite Kweichow Moutai and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| Kweichow Moutai vs. Caihong Display Devices | Kweichow Moutai vs. Ningxia Building Materials | Kweichow Moutai vs. Guangzhou Tinci Materials | Kweichow Moutai vs. Cultural Investment Holdings |
| Mengtian Home vs. Kweichow Moutai Co | Mengtian Home vs. NAURA Technology Group | Mengtian Home vs. Zhejiang Orient Gene | Mengtian Home vs. APT Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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