Correlation Between Kweichow Moutai and Road Environment
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By analyzing existing cross correlation between Kweichow Moutai Co and Road Environment Technology, you can compare the effects of market volatilities on Kweichow Moutai and Road Environment 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 Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Road Environment.
Diversification Opportunities for Kweichow Moutai and Road Environment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kweichow and Road is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec 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 Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Road Environment go up and down completely randomly.
Pair Corralation between Kweichow Moutai and Road Environment
Assuming the 90 days trading horizon Kweichow Moutai is expected to generate 2.78 times less return on investment than Road Environment. But when comparing it to its historical volatility, Kweichow Moutai Co is 1.55 times less risky than Road Environment. It trades about 0.07 of its potential returns per unit of risk. Road Environment Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,072 in Road Environment Technology on September 25, 2024 and sell it today you would earn a total of 302.00 from holding Road Environment Technology or generate 28.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kweichow Moutai Co vs. Road Environment Technology
Performance |
Timeline |
Kweichow Moutai |
Road Environment Tec |
Kweichow Moutai and Road Environment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kweichow Moutai and Road Environment
The main advantage of trading using opposite Kweichow Moutai and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment'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 |
Road Environment vs. Sportsoul Co Ltd | Road Environment vs. Lander Sports Development | Road Environment vs. Shanghai Construction Group | Road Environment vs. China Railway Construction |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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