Correlation Between Kweichow Moutai and Dazhong Transportation
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By analyzing existing cross correlation between Kweichow Moutai Co and Dazhong Transportation Group, you can compare the effects of market volatilities on Kweichow Moutai and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Dazhong Transportation.
Diversification Opportunities for Kweichow Moutai and Dazhong Transportation
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Dazhong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Dazhong Transportation
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Dazhong Transportation. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.5 times less risky than Dazhong Transportation. The stock trades about -0.04 of its potential returns per unit of risk. The Dazhong Transportation Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Dazhong Transportation Group on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Dazhong Transportation Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kweichow Moutai Co vs. Dazhong Transportation Group
Performance |
| Timeline |
| Kweichow Moutai |
| Dazhong Transportation |
Kweichow Moutai and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kweichow Moutai and Dazhong Transportation
The main advantage of trading using opposite Kweichow Moutai and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Kweichow Moutai vs. Xiangtan Electrochemical Scientific | Kweichow Moutai vs. North Huajin Chemical | Kweichow Moutai vs. Xinjiang Zhongtai Chemical | Kweichow Moutai vs. Shenzhen SDG Information |
| Dazhong Transportation vs. Kweichow Moutai Co | Dazhong Transportation vs. NAURA Technology Group | Dazhong Transportation vs. Zhejiang Orient Gene | Dazhong Transportation 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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