Correlation Between Nanxing Furniture and Fujian Longzhou
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Nanxing Furniture and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Fujian Longzhou.
Diversification Opportunities for Nanxing Furniture and Fujian Longzhou
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Fujian is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Fujian Longzhou
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.4 times more return on investment than Fujian Longzhou. However, Nanxing Furniture is 1.4 times more volatile than Fujian Longzhou Transportation. It trades about 0.16 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about 0.2 per unit of risk. If you would invest 1,362 in Nanxing Furniture Machinery on September 14, 2024 and sell it today you would earn a total of 256.00 from holding Nanxing Furniture Machinery or generate 18.8% 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. Fujian Longzhou Transportation
Performance |
| Timeline |
| Nanxing Furniture |
| Fujian Longzhou Tran |
Nanxing Furniture and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Fujian Longzhou
The main advantage of trading using opposite Nanxing Furniture and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Kweichow Moutai Co | Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. China Mobile Limited |
| Fujian Longzhou vs. New China Life | Fujian Longzhou vs. Ming Yang Smart | Fujian Longzhou vs. 159681 | Fujian Longzhou vs. 159005 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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