Correlation Between NAURA Technology and Kweichow Moutai

Can any of the company-specific risk be diversified away by investing in both NAURA Technology and Kweichow Moutai at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NAURA Technology and Kweichow Moutai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NAURA Technology Group and Kweichow Moutai Co, you can compare the effects of market volatilities on NAURA Technology 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 NAURA Technology with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAURA Technology and Kweichow Moutai.

Diversification Opportunities for NAURA Technology and Kweichow Moutai

0.25

Correlation Coefficient

NAURA Technology  Kweichow Moutai

Modest diversification

The 3 months correlation between NAURA and Kweichow is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NAURA Technology 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 NAURA Technology 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 NAURA Technology 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 NAURA Technology i.e., NAURA Technology and Kweichow Moutai go up and down completely randomly.

Pair Corralation between NAURA Technology and Kweichow Moutai

Assuming the 90 days trading horizon NAURA Technology Group is expected to generate 2.04 times more return on investment than Kweichow Moutai. However, NAURA Technology is 2.04 times more volatile than Kweichow Moutai Co. It trades about 0.1 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.05 per unit of risk. If you would invest  41,297  in NAURA Technology Group on November 28, 2024 and sell it today you would earn a total of  5,123  from holding NAURA Technology Group or generate 12.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NAURA Technology Group  vs.  Kweichow Moutai Co

NAURA Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NAURA Technology Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NAURA Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Kweichow Moutai

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kweichow Moutai Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kweichow Moutai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NAURA Technology and Kweichow Moutai

The main advantage of trading using opposite NAURA Technology and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAURA Technology 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.

The idea behind NAURA Technology Group and Kweichow Moutai Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.