Correlation Between Kweichow Moutai and Weichai Heavy
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By analyzing existing cross correlation between Kweichow Moutai Co and Weichai Heavy Machinery, you can compare the effects of market volatilities on Kweichow Moutai and Weichai Heavy 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 Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Weichai Heavy.
Diversification Opportunities for Kweichow Moutai and Weichai Heavy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kweichow and Weichai is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery 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 Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Weichai Heavy go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Weichai Heavy
Assuming the 90 days trading horizon Kweichow Moutai is expected to generate 8.66 times less return on investment than Weichai Heavy. But when comparing it to its historical volatility, Kweichow Moutai Co is 3.53 times less risky than Weichai Heavy. It trades about 0.08 of its potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,302 in Weichai Heavy Machinery on September 25, 2024 and sell it today you would earn a total of 229.00 from holding Weichai Heavy Machinery or generate 17.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Kweichow Moutai Co vs. Weichai Heavy Machinery
Performance |
Timeline |
Kweichow Moutai |
Weichai Heavy Machinery |
Kweichow Moutai and Weichai Heavy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kweichow Moutai and Weichai Heavy
The main advantage of trading using opposite Kweichow Moutai and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's 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 |
Weichai Heavy vs. Bank of China | Weichai Heavy vs. Kweichow Moutai Co | Weichai Heavy vs. PetroChina Co Ltd | Weichai Heavy vs. Bank of Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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