Correlation Between Nanxing Furniture and NAURA Technology
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By analyzing existing cross correlation between Nanxing Furniture Machinery and NAURA Technology Group, you can compare the effects of market volatilities on Nanxing Furniture and NAURA Technology 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 NAURA Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and NAURA Technology.
Diversification Opportunities for Nanxing Furniture and NAURA Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanxing and NAURA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and NAURA Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAURA Technology 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 NAURA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAURA Technology has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and NAURA Technology go up and down completely randomly.
Pair Corralation between Nanxing Furniture and NAURA Technology
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 2.3 times more return on investment than NAURA Technology. However, Nanxing Furniture is 2.3 times more volatile than NAURA Technology Group. It trades about 0.3 of its potential returns per unit of risk. NAURA Technology Group is currently generating about 0.24 per unit of risk. If you would invest 1,729 in Nanxing Furniture Machinery on December 8, 2024 and sell it today you would earn a total of 716.00 from holding Nanxing Furniture Machinery or generate 41.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. NAURA Technology Group
Performance |
| Timeline |
| Nanxing Furniture |
| NAURA Technology |
Nanxing Furniture and NAURA Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and NAURA Technology
The main advantage of trading using opposite Nanxing Furniture and NAURA Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, NAURA Technology 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 NAURA Technology will offset losses from the drop in NAURA Technology's long position.| Nanxing Furniture vs. Industrial and Commercial | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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