Correlation Between Kweichow Moutai and Jiangsu Bioperfectus

Can any of the company-specific risk be diversified away by investing in both Kweichow Moutai and Jiangsu Bioperfectus at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kweichow Moutai and Jiangsu Bioperfectus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kweichow Moutai Co and Jiangsu Bioperfectus Technologies, you can compare the effects of market volatilities on Kweichow Moutai and Jiangsu Bioperfectus 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 Jiangsu Bioperfectus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kweichow Moutai and Jiangsu Bioperfectus.

Diversification Opportunities for Kweichow Moutai and Jiangsu Bioperfectus

0.48

Correlation Coefficient

Kweichow Moutai  Jiangsu Bioperfectus

Very weak diversification

The 3 months correlation between Kweichow and Jiangsu is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kweichow Moutai Co and Jiangsu Bioperfectus Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Bioperfectus 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 Jiangsu Bioperfectus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Bioperfectus has no effect on the direction of Kweichow Moutai i.e., Kweichow Moutai and Jiangsu Bioperfectus go up and down completely randomly.

Pair Corralation between Kweichow Moutai and Jiangsu Bioperfectus

Assuming the 90 days trading horizon Kweichow Moutai Co is expected to generate 0.92 times more return on investment than Jiangsu Bioperfectus. However, Kweichow Moutai Co is 1.08 times less risky than Jiangsu Bioperfectus. It trades about 0.07 of its potential returns per unit of risk. Jiangsu Bioperfectus Technologies is currently generating about -0.05 per unit of risk. If you would invest  139,500  in Kweichow Moutai Co on September 1, 2024 and sell it today you would earn a total of  13,074  from holding Kweichow Moutai Co or generate 9.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Kweichow Moutai Co  vs.  Jiangsu Bioperfectus Technolog

Kweichow Moutai

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kweichow Moutai Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kweichow Moutai may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jiangsu Bioperfectus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiangsu Bioperfectus Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kweichow Moutai and Jiangsu Bioperfectus

The main advantage of trading using opposite Kweichow Moutai and Jiangsu Bioperfectus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kweichow Moutai position performs unexpectedly, Jiangsu Bioperfectus 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 Jiangsu Bioperfectus will offset losses from the drop in Jiangsu Bioperfectus' long position.

The idea behind Kweichow Moutai Co and Jiangsu Bioperfectus Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.