Correlation Between Nanxing Furniture and Wenzhou Hongfeng
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on Nanxing Furniture and Wenzhou Hongfeng 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 Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Wenzhou Hongfeng.
Diversification Opportunities for Nanxing Furniture and Wenzhou Hongfeng
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Wenzhou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele 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 Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Wenzhou Hongfeng
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.95 times more return on investment than Wenzhou Hongfeng. However, Nanxing Furniture is 1.95 times more volatile than Wenzhou Hongfeng Electrical. It trades about 0.2 of its potential returns per unit of risk. Wenzhou Hongfeng Electrical is currently generating about -0.01 per unit of risk. If you would invest 1,371 in Nanxing Furniture Machinery on September 12, 2024 and sell it today you would earn a total of 323.00 from holding Nanxing Furniture Machinery or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| Nanxing Furniture |
| Wenzhou Hongfeng Ele |
Nanxing Furniture and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Wenzhou Hongfeng
The main advantage of trading using opposite Nanxing Furniture and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.| Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Bank of China | Nanxing Furniture vs. PetroChina Co Ltd |
| Wenzhou Hongfeng vs. YLZ Information Tech | Wenzhou Hongfeng vs. Xiamen Goldenhome Co | Wenzhou Hongfeng vs. ButOne Information Corp | Wenzhou Hongfeng vs. Nanxing Furniture Machinery |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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