Correlation Between Shenzhen Transsion and Kweichow Moutai
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By analyzing existing cross correlation between Shenzhen Transsion Holdings and Kweichow Moutai Co, you can compare the effects of market volatilities on Shenzhen Transsion 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 Shenzhen Transsion with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Transsion and Kweichow Moutai.
Diversification Opportunities for Shenzhen Transsion and Kweichow Moutai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Kweichow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Transsion Holdings and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Shenzhen Transsion 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 Shenzhen Transsion Holdings 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 Shenzhen Transsion i.e., Shenzhen Transsion and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Shenzhen Transsion and Kweichow Moutai
Assuming the 90 days trading horizon Shenzhen Transsion Holdings is expected to under-perform the Kweichow Moutai. In addition to that, Shenzhen Transsion is 1.79 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 -0.1 per unit of volatility. If you would invest 156,500 in Kweichow Moutai Co on August 29, 2024 and sell it today you would lose (5,600) from holding Kweichow Moutai Co or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Transsion Holdings vs. Kweichow Moutai Co
Performance |
| Timeline |
| Shenzhen Transsion |
| Kweichow Moutai |
Shenzhen Transsion and Kweichow Moutai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Transsion and Kweichow Moutai
The main advantage of trading using opposite Shenzhen Transsion and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Transsion 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.| Shenzhen Transsion vs. Keeson Technology Corp | Shenzhen Transsion vs. Holitech Technology Co | Shenzhen Transsion vs. Qingdao NovelBeam Technology | Shenzhen Transsion vs. Ye Chiu Metal |
| Kweichow Moutai vs. PetroChina Co Ltd | Kweichow Moutai vs. China Mobile Limited | Kweichow Moutai vs. Ping An Insurance | Kweichow Moutai vs. China Petroleum Chemical |
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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