Correlation Between Changchun Engley and Kweichow Moutai
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By analyzing existing cross correlation between Changchun Engley Automobile and Kweichow Moutai Co, you can compare the effects of market volatilities on Changchun Engley 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 Changchun Engley with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and Kweichow Moutai.
Diversification Opportunities for Changchun Engley and Kweichow Moutai
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Kweichow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Changchun Engley 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 Changchun Engley Automobile 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 Changchun Engley i.e., Changchun Engley and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Changchun Engley and Kweichow Moutai
Assuming the 90 days trading horizon Changchun Engley Automobile is expected to under-perform the Kweichow Moutai. In addition to that, Changchun Engley is 1.32 times more volatile than Kweichow Moutai Co. It trades about -0.03 of its total potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.02 per unit of volatility. If you would invest 165,320 in Kweichow Moutai Co on September 2, 2024 and sell it today you would lose (12,746) from holding Kweichow Moutai Co or give up 7.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Engley Automobile vs. Kweichow Moutai Co
Performance |
| Timeline |
| Changchun Engley Aut |
| Kweichow Moutai |
Changchun Engley and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and Kweichow Moutai
The main advantage of trading using opposite Changchun Engley and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley 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.| Changchun Engley vs. BYD Co Ltd | Changchun Engley vs. China Mobile Limited | Changchun Engley vs. Agricultural Bank of | Changchun Engley vs. Industrial and Commercial |
| Kweichow Moutai vs. Caihong Display Devices | Kweichow Moutai vs. Ningxia Building Materials | Kweichow Moutai vs. Guangzhou Tinci Materials | Kweichow Moutai vs. Cultural Investment Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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