Correlation Between Zhongshan Broad and Nanxing Furniture
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By analyzing existing cross correlation between Zhongshan Broad Ocean Motor and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Zhongshan Broad 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 Zhongshan Broad with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Broad and Nanxing Furniture.
Diversification Opportunities for Zhongshan Broad and Nanxing Furniture
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongshan and Nanxing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Broad Ocean Motor and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Zhongshan Broad 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 Zhongshan Broad Ocean Motor 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 Zhongshan Broad i.e., Zhongshan Broad and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Zhongshan Broad and Nanxing Furniture
Assuming the 90 days trading horizon Zhongshan Broad is expected to generate 4.08 times less return on investment than Nanxing Furniture. But when comparing it to its historical volatility, Zhongshan Broad Ocean Motor is 1.77 times less risky than Nanxing Furniture. It trades about 0.02 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,019 in Nanxing Furniture Machinery on September 3, 2024 and sell it today you would earn a total of 500.00 from holding Nanxing Furniture Machinery or generate 49.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Broad Ocean Motor vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Zhongshan Broad Ocean |
| Nanxing Furniture |
Zhongshan Broad and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Broad and Nanxing Furniture
The main advantage of trading using opposite Zhongshan Broad and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Broad 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.| Zhongshan Broad vs. Cultural Investment Holdings | Zhongshan Broad vs. Gome Telecom Equipment | Zhongshan Broad vs. Bus Online Co | Zhongshan Broad vs. Holitech Technology Co |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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