Correlation Between Chengtun Mining and Kweichow Moutai
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By analyzing existing cross correlation between Chengtun Mining Group and Kweichow Moutai Co, you can compare the effects of market volatilities on Chengtun Mining and Kweichow Moutai 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 Chengtun Mining with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengtun Mining and Kweichow Moutai.
Diversification Opportunities for Chengtun Mining and Kweichow Moutai
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengtun and Kweichow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chengtun Mining Group and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Chengtun Mining 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 Chengtun Mining Group are associated (or correlated) with Kweichow Moutai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kweichow Moutai has no effect on the direction of Chengtun Mining i.e., Chengtun Mining and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Chengtun Mining and Kweichow Moutai
Assuming the 90 days trading horizon Chengtun Mining Group is expected to under-perform the Kweichow Moutai. In addition to that, Chengtun Mining is 2.23 times more volatile than Kweichow Moutai Co. It trades about -0.09 of its total potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.17 per unit of volatility. If you would invest 159,801 in Kweichow Moutai Co on September 12, 2024 and sell it today you would lose (5,142) from holding Kweichow Moutai Co or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengtun Mining Group vs. Kweichow Moutai Co
Performance |
| Timeline |
| Chengtun Mining Group |
| Kweichow Moutai |
Chengtun Mining and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengtun Mining and Kweichow Moutai
The main advantage of trading using opposite Chengtun Mining and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengtun Mining position performs unexpectedly, Kweichow Moutai 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 Kweichow Moutai will offset losses from the drop in Kweichow Moutai's long position.| Chengtun Mining vs. Zijin Mining Group | Chengtun Mining vs. Wanhua Chemical Group | Chengtun Mining vs. Baoshan Iron Steel | Chengtun Mining vs. Rongsheng Petrochemical Co |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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