Correlation Between Nanxing Furniture and Jiangxi Hengda
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Nanxing Furniture and Jiangxi Hengda 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 Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Jiangxi Hengda.
Diversification Opportunities for Nanxing Furniture and Jiangxi Hengda
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nanxing and Jiangxi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi 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 Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Jiangxi Hengda
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.34 times more return on investment than Jiangxi Hengda. However, Nanxing Furniture is 1.34 times more volatile than Jiangxi Hengda Hi Tech. It trades about 0.14 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about -0.01 per unit of risk. If you would invest 1,558 in Nanxing Furniture Machinery on October 30, 2024 and sell it today you would earn a total of 191.00 from holding Nanxing Furniture Machinery or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Nanxing Furniture |
| Jiangxi Hengda Hi |
Nanxing Furniture and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Jiangxi Hengda
The main advantage of trading using opposite Nanxing Furniture and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Nanxing Furniture vs. PetroChina Co Ltd | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. China Petroleum Chemical | Nanxing Furniture vs. China Construction Bank |
| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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