Correlation Between Kweichow Moutai and Sichuan Furong
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By analyzing existing cross correlation between Kweichow Moutai Co and Sichuan Furong Technology, you can compare the effects of market volatilities on Kweichow Moutai and Sichuan Furong 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 Sichuan Furong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Sichuan Furong.
Diversification Opportunities for Kweichow Moutai and Sichuan Furong
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Sichuan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Sichuan Furong Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Furong Technology 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 Sichuan Furong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Furong Technology has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Sichuan Furong go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Sichuan Furong
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Sichuan Furong. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 29.87 times less risky than Sichuan Furong. The stock trades about -0.01 of its potential returns per unit of risk. The Sichuan Furong Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,197 in Sichuan Furong Technology on September 26, 2024 and sell it today you would earn a total of 78.00 from holding Sichuan Furong Technology or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Sichuan Furong Technology
Performance |
| Timeline |
| Kweichow Moutai |
| Sichuan Furong Technology |
Kweichow Moutai and Sichuan Furong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Sichuan Furong
The main advantage of trading using opposite Kweichow Moutai and Sichuan Furong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Sichuan Furong 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 Sichuan Furong will offset losses from the drop in Sichuan Furong's long position.| Kweichow Moutai vs. China Life Insurance | Kweichow Moutai vs. Beijing Wandong Medical | Kweichow Moutai vs. Allmed Medical Products | Kweichow Moutai vs. Lootom Telcovideo Network |
| Sichuan Furong vs. Bank of China | Sichuan Furong vs. Kweichow Moutai Co | Sichuan Furong vs. PetroChina Co Ltd | Sichuan Furong vs. Bank of Communications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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