Correlation Between Nanxing Furniture and Zhongshan Broad
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Nanxing Furniture and Zhongshan Broad 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 Nanxing Furniture with a short position of Zhongshan Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Zhongshan Broad.
Diversification Opportunities for Nanxing Furniture and Zhongshan Broad
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Zhongshan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean and Nanxing Furniture 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 Nanxing Furniture Machinery are associated (or correlated) with Zhongshan Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Zhongshan Broad go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Zhongshan Broad
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.77 times more return on investment than Zhongshan Broad. However, Nanxing Furniture is 1.77 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.04 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about 0.02 per unit of risk. 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 |
Nanxing Furniture Machinery vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Nanxing Furniture |
| Zhongshan Broad Ocean |
Nanxing Furniture and Zhongshan Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Zhongshan Broad
The main advantage of trading using opposite Nanxing Furniture and Zhongshan Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Zhongshan Broad 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 Zhongshan Broad will offset losses from the drop in Zhongshan Broad's long position.| Nanxing Furniture vs. Cultural Investment Holdings | Nanxing Furniture vs. Gome Telecom Equipment | Nanxing Furniture vs. Bus Online Co | Nanxing Furniture vs. Holitech Technology Co |
| Zhongshan Broad vs. Cultural Investment Holdings | Zhongshan Broad vs. Gome Telecom Equipment | Zhongshan Broad vs. Bus Online Co | Zhongshan Broad 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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