Correlation Between Hunan TV and Nanxing Furniture
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By analyzing existing cross correlation between Hunan TV Broadcast and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Hunan TV and Nanxing Furniture 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 Hunan TV with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan TV and Nanxing Furniture.
Diversification Opportunities for Hunan TV and Nanxing Furniture
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunan and Nanxing is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hunan TV Broadcast and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Hunan TV 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 Hunan TV Broadcast are associated (or correlated) with Nanxing Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanxing Furniture has no effect on the direction of Hunan TV i.e., Hunan TV and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Hunan TV and Nanxing Furniture
Assuming the 90 days trading horizon Hunan TV Broadcast is expected to generate 1.05 times more return on investment than Nanxing Furniture. However, Hunan TV is 1.05 times more volatile than Nanxing Furniture Machinery. It trades about 0.05 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.04 per unit of risk. If you would invest 510.00 in Hunan TV Broadcast on September 3, 2024 and sell it today you would earn a total of 315.00 from holding Hunan TV Broadcast or generate 61.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan TV Broadcast vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Hunan TV Broadcast |
| Nanxing Furniture |
Hunan TV and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan TV and Nanxing Furniture
The main advantage of trading using opposite Hunan TV and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan TV position performs unexpectedly, Nanxing Furniture 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 Nanxing Furniture will offset losses from the drop in Nanxing Furniture's long position.| Hunan TV vs. Maccura Biotechnology Co | Hunan TV vs. Shanghai Rendu Biotechnology | Hunan TV vs. Jinhe Biotechnology Co | Hunan TV vs. Wuhan Hvsen Biotechnology |
| Nanxing Furniture vs. Cultural Investment Holdings | Nanxing Furniture vs. Gome Telecom Equipment | Nanxing Furniture vs. Bus Online Co | Nanxing Furniture vs. Holitech Technology Co |
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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