Correlation Between Namchow Food and Kweichow Moutai
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By analyzing existing cross correlation between Namchow Food Group and Kweichow Moutai Co, you can compare the effects of market volatilities on Namchow Food 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 Namchow Food with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namchow Food and Kweichow Moutai.
Diversification Opportunities for Namchow Food and Kweichow Moutai
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Namchow and Kweichow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Namchow Food 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 Namchow Food 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 Namchow Food 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 Namchow Food i.e., Namchow Food and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Namchow Food and Kweichow Moutai
Assuming the 90 days trading horizon Namchow Food Group is expected to under-perform the Kweichow Moutai. In addition to that, Namchow Food is 1.22 times more volatile than Kweichow Moutai Co. It trades about -0.02 of its total potential returns per unit of risk. Kweichow Moutai Co is currently generating about 0.0 per unit of volatility. If you would invest 164,191 in Kweichow Moutai Co on August 27, 2024 and sell it today you would lose (13,409) from holding Kweichow Moutai Co or give up 8.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namchow Food Group vs. Kweichow Moutai Co
Performance |
| Timeline |
| Namchow Food Group |
| Kweichow Moutai |
Namchow Food and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namchow Food and Kweichow Moutai
The main advantage of trading using opposite Namchow Food and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namchow Food 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.| Namchow Food vs. China Petroleum Chemical | Namchow Food vs. PetroChina Co Ltd | Namchow Food vs. China State Construction | Namchow Food vs. China Railway Group |
| Kweichow Moutai vs. Xiangyang Automobile Bearing | Kweichow Moutai vs. Northking Information Technology | Kweichow Moutai vs. Niutech Environment Technology | Kweichow Moutai vs. Western Superconducting Tech |
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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