Correlation Between Guangzhou Boji and Kweichow Moutai

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Guangzhou Boji 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 Guangzhou Boji and Kweichow Moutai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangzhou Boji Medical and Kweichow Moutai Co, you can compare the effects of market volatilities on Guangzhou Boji 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 Guangzhou Boji with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Boji and Kweichow Moutai.

Diversification Opportunities for Guangzhou Boji and Kweichow Moutai

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Guangzhou and Kweichow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Boji Medical and Kweichow Moutai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kweichow Moutai and Guangzhou Boji 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 Guangzhou Boji Medical 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 Guangzhou Boji i.e., Guangzhou Boji and Kweichow Moutai go up and down completely randomly.

Pair Corralation between Guangzhou Boji and Kweichow Moutai

Assuming the 90 days trading horizon Guangzhou Boji Medical is expected to generate 1.34 times more return on investment than Kweichow Moutai. However, Guangzhou Boji is 1.34 times more volatile than Kweichow Moutai Co. It trades about 0.13 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about 0.07 per unit of risk. If you would invest  727.00  in Guangzhou Boji Medical on September 4, 2024 and sell it today you would earn a total of  200.00  from holding Guangzhou Boji Medical or generate 27.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Guangzhou Boji Medical  vs.  Kweichow Moutai Co

 Performance 
       Timeline  
Guangzhou Boji Medical 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Boji Medical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Boji sustained solid returns over the last few months and may actually be approaching a breakup point.
Kweichow Moutai 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Kweichow Moutai Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kweichow Moutai may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Guangzhou Boji and Kweichow Moutai Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guangzhou Boji and Kweichow Moutai

The main advantage of trading using opposite Guangzhou Boji and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Boji 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 Guangzhou Boji Medical 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.
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Stocks Directory
Find actively traded stocks across global markets
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Equity Valuation
Check real value of public entities based on technical and fundamental data