Correlation Between Beijing Wandong and Kweichow Moutai
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By analyzing existing cross correlation between Beijing Wandong Medical and Kweichow Moutai Co, you can compare the effects of market volatilities on Beijing Wandong 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 Beijing Wandong with a short position of Kweichow Moutai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and Kweichow Moutai.
Diversification Opportunities for Beijing Wandong and Kweichow Moutai
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Kweichow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong 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 Beijing Wandong 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 Beijing Wandong 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 Beijing Wandong i.e., Beijing Wandong and Kweichow Moutai go up and down completely randomly.
Pair Corralation between Beijing Wandong and Kweichow Moutai
Assuming the 90 days trading horizon Beijing Wandong Medical is expected to generate 1.19 times more return on investment than Kweichow Moutai. However, Beijing Wandong is 1.19 times more volatile than Kweichow Moutai Co. It trades about 0.19 of its potential returns per unit of risk. Kweichow Moutai Co is currently generating about 0.13 per unit of risk. If you would invest 1,191 in Beijing Wandong Medical on September 17, 2024 and sell it today you would earn a total of 480.00 from holding Beijing Wandong Medical or generate 40.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Wandong Medical vs. Kweichow Moutai Co
Performance |
Timeline |
Beijing Wandong Medical |
Kweichow Moutai |
Beijing Wandong and Kweichow Moutai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Wandong and Kweichow Moutai
The main advantage of trading using opposite Beijing Wandong and Kweichow Moutai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong 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.Beijing Wandong vs. Industrial and Commercial | Beijing Wandong vs. Kweichow Moutai Co | Beijing Wandong vs. Agricultural Bank of | Beijing Wandong vs. China Mobile Limited |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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