Correlation Between China Galaxy and Kweichow Moutai
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By analyzing existing cross correlation between China Galaxy Securities and Kweichow Moutai Co, you can compare the effects of market volatilities on China Galaxy 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 China Galaxy with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Galaxy and Kweichow Moutai.
Diversification Opportunities for China Galaxy and Kweichow Moutai
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Kweichow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Galaxy Securities and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and China Galaxy 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 China Galaxy Securities 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 China Galaxy i.e., China Galaxy and Kweichow Moutai go up and down completely randomly.
Pair Corralation between China Galaxy and Kweichow Moutai
Assuming the 90 days trading horizon China Galaxy Securities is expected to under-perform the Kweichow Moutai. In addition to that, China Galaxy is 2.12 times more volatile than Kweichow Moutai Co. It trades about -0.18 of its total potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.08 per unit of volatility. If you would invest 150,368 in Kweichow Moutai Co on October 17, 2024 and sell it today you would lose (3,118) from holding Kweichow Moutai Co or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Galaxy Securities vs. Kweichow Moutai Co
Performance |
| Timeline |
| China Galaxy Securities |
| Kweichow Moutai |
China Galaxy and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Galaxy and Kweichow Moutai
The main advantage of trading using opposite China Galaxy and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Galaxy 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.| China Galaxy vs. Jinlong Machinery Electronic | China Galaxy vs. Iat Automobile Technology | China Galaxy vs. Huasi Agricultural Development | China Galaxy vs. Masterwork Machinery |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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