Correlation Between Beijing Kaiwen and Nanxing Furniture
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By analyzing existing cross correlation between Beijing Kaiwen Education and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Beijing Kaiwen 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 Beijing Kaiwen with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kaiwen and Nanxing Furniture.
Diversification Opportunities for Beijing Kaiwen and Nanxing Furniture
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beijing and Nanxing is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kaiwen Education and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Beijing Kaiwen 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 Beijing Kaiwen Education 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 Beijing Kaiwen i.e., Beijing Kaiwen and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Beijing Kaiwen and Nanxing Furniture
Assuming the 90 days trading horizon Beijing Kaiwen Education is expected to under-perform the Nanxing Furniture. In addition to that, Beijing Kaiwen is 1.23 times more volatile than Nanxing Furniture Machinery. It trades about -0.33 of its total potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about -0.2 per unit of volatility. If you would invest 1,640 in Nanxing Furniture Machinery on October 14, 2024 and sell it today you would lose (227.00) from holding Nanxing Furniture Machinery or give up 13.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Kaiwen Education vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Beijing Kaiwen Education |
| Nanxing Furniture |
Beijing Kaiwen and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Kaiwen and Nanxing Furniture
The main advantage of trading using opposite Beijing Kaiwen and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kaiwen 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.| Beijing Kaiwen vs. Xiamen Goldenhome Co | Beijing Kaiwen vs. Shanghai Shuixing Home | Beijing Kaiwen vs. AUPU Home Style | Beijing Kaiwen vs. Ningbo Homelink Eco iTech |
| Nanxing Furniture vs. Changjiang Publishing Media | Nanxing Furniture vs. Xinhua Winshare Publishing | Nanxing Furniture vs. Beijing Kaiwen Education | Nanxing Furniture vs. BTG Hotels Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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