Correlation Between Sieyuan Electric and Kweichow Moutai
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By analyzing existing cross correlation between Sieyuan Electric Co and Kweichow Moutai Co, you can compare the effects of market volatilities on Sieyuan Electric 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 Sieyuan Electric with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sieyuan Electric and Kweichow Moutai.
Diversification Opportunities for Sieyuan Electric and Kweichow Moutai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sieyuan and Kweichow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sieyuan Electric Co and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Sieyuan Electric 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 Sieyuan Electric Co 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 Sieyuan Electric i.e., Sieyuan Electric and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Sieyuan Electric and Kweichow Moutai
Assuming the 90 days trading horizon Sieyuan Electric is expected to generate 1.96 times less return on investment than Kweichow Moutai. But when comparing it to its historical volatility, Sieyuan Electric Co is 1.13 times less risky than Kweichow Moutai. It trades about 0.05 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 137,260 in Kweichow Moutai Co on September 24, 2024 and sell it today you would earn a total of 14,940 from holding Kweichow Moutai Co or generate 10.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sieyuan Electric Co vs. Kweichow Moutai Co
Performance |
Timeline |
Sieyuan Electric |
Kweichow Moutai |
Sieyuan Electric and Kweichow Moutai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sieyuan Electric and Kweichow Moutai
The main advantage of trading using opposite Sieyuan Electric and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sieyuan Electric 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.Sieyuan Electric vs. Kweichow Moutai Co | Sieyuan Electric vs. Contemporary Amperex Technology | Sieyuan Electric vs. G bits Network Technology | Sieyuan Electric vs. BYD Co Ltd |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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