Correlation Between Kweichow Moutai and Liaoning Chengda
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By analyzing existing cross correlation between Kweichow Moutai Co and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Kweichow Moutai and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Liaoning Chengda.
Diversification Opportunities for Kweichow Moutai and Liaoning Chengda
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kweichow and Liaoning is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Liaoning Chengda
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Liaoning Chengda. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.08 times less risky than Liaoning Chengda. The stock trades about -0.04 of its potential returns per unit of risk. The Liaoning Chengda Biotechnology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,723 in Liaoning Chengda Biotechnology on September 4, 2024 and sell it today you would earn a total of 66.00 from holding Liaoning Chengda Biotechnology or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Kweichow Moutai |
| Liaoning Chengda Bio |
Kweichow Moutai and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Liaoning Chengda
The main advantage of trading using opposite Kweichow Moutai and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Kweichow Moutai vs. Chengtun Mining Group | Kweichow Moutai vs. Chenzhou Jingui Silver | Kweichow Moutai vs. Guangdong Silvere Sci | Kweichow Moutai vs. Jinhui Mining Co |
| Liaoning Chengda vs. Kweichow Moutai Co | Liaoning Chengda vs. Shenzhen Mindray Bio Medical | Liaoning Chengda vs. Jiangsu Pacific Quartz | Liaoning Chengda 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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