Correlation Between Kweichow Moutai and National Silicon
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By analyzing existing cross correlation between Kweichow Moutai Co and National Silicon Industry, you can compare the effects of market volatilities on Kweichow Moutai and National Silicon 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 National Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and National Silicon.
Diversification Opportunities for Kweichow Moutai and National Silicon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kweichow and National is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and National Silicon Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Silicon Industry 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 National Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Silicon Industry has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and National Silicon go up and down completely randomly.
Pair Corralation between Kweichow Moutai and National Silicon
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.42 times more return on investment than National Silicon. However, Kweichow Moutai Co is 2.39 times less risky than National Silicon. It trades about -0.02 of its potential returns per unit of risk. National Silicon Industry is currently generating about -0.08 per unit of risk. If you would invest 153,162 in Kweichow Moutai Co on August 30, 2024 and sell it today you would lose (1,257) from holding Kweichow Moutai Co or give up 0.82% 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. National Silicon Industry
Performance |
| Timeline |
| Kweichow Moutai |
| National Silicon Industry |
Kweichow Moutai and National Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and National Silicon
The main advantage of trading using opposite Kweichow Moutai and National Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, National Silicon 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 National Silicon will offset losses from the drop in National Silicon's long position.| Kweichow Moutai vs. PetroChina Co Ltd | Kweichow Moutai vs. China Mobile Limited | Kweichow Moutai vs. Ping An Insurance | Kweichow Moutai vs. China Petroleum Chemical |
| National Silicon vs. China State Construction | National Silicon vs. Huafa Industrial Co | National Silicon vs. China International Capital | National Silicon vs. Kweichow Moutai Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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