Correlation Between Soochow Securities and Kweichow Moutai
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By analyzing existing cross correlation between Soochow Securities Co and Kweichow Moutai Co, you can compare the effects of market volatilities on Soochow Securities 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 Soochow Securities with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soochow Securities and Kweichow Moutai.
Diversification Opportunities for Soochow Securities and Kweichow Moutai
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Soochow and Kweichow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Soochow Securities 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 Soochow Securities 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 Soochow Securities 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 Soochow Securities i.e., Soochow Securities and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Soochow Securities and Kweichow Moutai
Assuming the 90 days trading horizon Soochow Securities Co is expected to generate 1.24 times more return on investment than Kweichow Moutai. However, Soochow Securities is 1.24 times more volatile than Kweichow Moutai Co. It trades about 0.03 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about -0.02 per unit of risk. If you would invest 731.00 in Soochow Securities Co on September 24, 2024 and sell it today you would earn a total of 77.00 from holding Soochow Securities Co or generate 10.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Soochow Securities Co vs. Kweichow Moutai Co
Performance |
Timeline |
Soochow Securities |
Kweichow Moutai |
Soochow Securities and Kweichow Moutai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Soochow Securities and Kweichow Moutai
The main advantage of trading using opposite Soochow Securities and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soochow Securities 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.Soochow Securities vs. Kweichow Moutai Co | Soochow Securities vs. Contemporary Amperex Technology | Soochow Securities vs. G bits Network Technology | Soochow Securities 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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