Correlation Between China Construction and Kweichow Moutai
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By analyzing existing cross correlation between China Construction Bank and Kweichow Moutai Co, you can compare the effects of market volatilities on China Construction 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 Construction with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Kweichow Moutai.
Diversification Opportunities for China Construction and Kweichow Moutai
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Kweichow is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank 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 Construction 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 Construction Bank 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 Construction i.e., China Construction and Kweichow Moutai go up and down completely randomly.
Pair Corralation between China Construction and Kweichow Moutai
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.84 times more return on investment than Kweichow Moutai. However, China Construction Bank is 1.19 times less risky than Kweichow Moutai. It trades about 0.09 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.02 per unit of risk. If you would invest 526.00 in China Construction Bank on November 5, 2024 and sell it today you would earn a total of 328.00 from holding China Construction Bank or generate 62.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Kweichow Moutai Co
Performance |
| Timeline |
| China Construction Bank |
| Kweichow Moutai |
China Construction and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Kweichow Moutai
The main advantage of trading using opposite China Construction and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction 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 Construction vs. Easyhome New Retail | China Construction vs. Chongqing Changan Automobile | China Construction vs. Ningbo Ligong Online | China Construction vs. Ningbo Tip Rubber |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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