Correlation Between Nanxing Furniture and Minami Acoustics
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Minami Acoustics Ltd, you can compare the effects of market volatilities on Nanxing Furniture and Minami Acoustics 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 Minami Acoustics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Minami Acoustics.
Diversification Opportunities for Nanxing Furniture and Minami Acoustics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nanxing and Minami is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Minami Acoustics Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minami Acoustics 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 Minami Acoustics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minami Acoustics has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Minami Acoustics go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Minami Acoustics
Assuming the 90 days trading horizon Nanxing Furniture is expected to generate 3.88 times less return on investment than Minami Acoustics. But when comparing it to its historical volatility, Nanxing Furniture Machinery is 1.47 times less risky than Minami Acoustics. It trades about 0.07 of its potential returns per unit of risk. Minami Acoustics Ltd is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,784 in Minami Acoustics Ltd on October 24, 2024 and sell it today you would earn a total of 3,146 from holding Minami Acoustics Ltd or generate 113.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Minami Acoustics Ltd
Performance |
| Timeline |
| Nanxing Furniture |
| Minami Acoustics |
Nanxing Furniture and Minami Acoustics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Minami Acoustics
The main advantage of trading using opposite Nanxing Furniture and Minami Acoustics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Minami Acoustics 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 Minami Acoustics will offset losses from the drop in Minami Acoustics' long position.| Nanxing Furniture vs. Anhui Huilong Agricultural | Nanxing Furniture vs. GigaDevice SemiconductorBeiji | Nanxing Furniture vs. Shantui Construction Machinery | Nanxing Furniture vs. Ningbo Construction 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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