Correlation Between Kweichow Moutai and Western Securities
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By analyzing existing cross correlation between Kweichow Moutai Co and Western Securities Co, you can compare the effects of market volatilities on Kweichow Moutai and Western Securities 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 Kweichow Moutai with a short position of Western Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Western Securities.
Diversification Opportunities for Kweichow Moutai and Western Securities
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Western is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Western Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Securities and Kweichow Moutai 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 Kweichow Moutai Co are associated (or correlated) with Western Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Securities has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Western Securities go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Western Securities
Assuming the 90 days trading horizon Kweichow Moutai Co is expected to under-perform the Western Securities. But the stock apears to be less risky and, when comparing its historical volatility, Kweichow Moutai Co is 1.43 times less risky than Western Securities. The stock trades about -0.01 of its potential returns per unit of risk. The Western Securities Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 661.00 in Western Securities Co on September 25, 2024 and sell it today you would earn a total of 179.00 from holding Western Securities Co or generate 27.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.75% |
Values | Daily Returns |
Kweichow Moutai Co vs. Western Securities Co
Performance |
Timeline |
Kweichow Moutai |
Western Securities |
Kweichow Moutai and Western Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kweichow Moutai and Western Securities
The main advantage of trading using opposite Kweichow Moutai and Western Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Western Securities 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 Western Securities will offset losses from the drop in Western Securities' long position.Kweichow Moutai vs. Beijing HuaYuanYiTong Thermal | Kweichow Moutai vs. Maxvision Technology Corp | Kweichow Moutai vs. Dongguan Aohai Technology | Kweichow Moutai vs. Chengtun Mining Group |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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