Correlation Between Nanxing Furniture and Ningbo Fangzheng
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Nanxing Furniture and Ningbo Fangzheng 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 Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Ningbo Fangzheng.
Diversification Opportunities for Nanxing Furniture and Ningbo Fangzheng
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and Ningbo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut 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 Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Ningbo Fangzheng
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 0.87 times more return on investment than Ningbo Fangzheng. However, Nanxing Furniture Machinery is 1.15 times less risky than Ningbo Fangzheng. It trades about 0.08 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.03 per unit of risk. If you would invest 1,171 in Nanxing Furniture Machinery on September 27, 2024 and sell it today you would earn a total of 329.00 from holding Nanxing Furniture Machinery or generate 28.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Nanxing Furniture |
| Ningbo Fangzheng Aut |
Nanxing Furniture and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Ningbo Fangzheng
The main advantage of trading using opposite Nanxing Furniture and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Nanxing Furniture vs. Bank of China | Nanxing Furniture vs. Kweichow Moutai Co | Nanxing Furniture vs. PetroChina Co Ltd | Nanxing Furniture vs. Bank of Communications |
| Ningbo Fangzheng vs. China Life Insurance | Ningbo Fangzheng vs. Cinda Securities Co | Ningbo Fangzheng vs. Piotech Inc A | Ningbo Fangzheng vs. Dongxing Sec 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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