Correlation Between Nanxing Furniture and Tianjin Hi
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Tianjin Hi Tech Development, you can compare the effects of market volatilities on Nanxing Furniture and Tianjin Hi 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 Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Tianjin Hi.
Diversification Opportunities for Nanxing Furniture and Tianjin Hi
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Tianjin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech 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 Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Tianjin Hi go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Tianjin Hi
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.77 times more return on investment than Tianjin Hi. However, Nanxing Furniture is 1.77 times more volatile than Tianjin Hi Tech Development. It trades about 0.12 of its potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about -0.01 per unit of risk. If you would invest 1,410 in Nanxing Furniture Machinery on August 28, 2024 and sell it today you would earn a total of 175.00 from holding Nanxing Furniture Machinery or generate 12.41% 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. Tianjin Hi Tech Development
Performance |
| Timeline |
| Nanxing Furniture |
| Tianjin Hi Tech |
Nanxing Furniture and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Tianjin Hi
The main advantage of trading using opposite Nanxing Furniture and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Tianjin Hi 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 Tianjin Hi will offset losses from the drop in Tianjin Hi's long position.| Nanxing Furniture vs. Biwin Storage Technology | Nanxing Furniture vs. PetroChina Co Ltd | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. China Construction Bank |
| Tianjin Hi vs. Zhengzhou Qianweiyangchu Food | Tianjin Hi vs. Great Sun Foods Co | Tianjin Hi vs. Digital China Information | Tianjin Hi vs. Namchow Food Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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