Correlation Between Nanxing Furniture and Tengda Construction
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Tengda Construction Group, you can compare the effects of market volatilities on Nanxing Furniture and Tengda Construction 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 Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Tengda Construction.
Diversification Opportunities for Nanxing Furniture and Tengda Construction
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Tengda is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda Construction 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 Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Tengda Construction go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Tengda Construction
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.55 times more return on investment than Tengda Construction. However, Nanxing Furniture is 1.55 times more volatile than Tengda Construction Group. It trades about 0.08 of its potential returns per unit of risk. Tengda Construction Group is currently generating about 0.1 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Tengda Construction Group
Performance |
| Timeline |
| Nanxing Furniture |
| Tengda Construction |
Nanxing Furniture and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Tengda Construction
The main advantage of trading using opposite Nanxing Furniture and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Tengda Construction 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 Tengda Construction will offset losses from the drop in Tengda Construction'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 |
| Tengda Construction vs. Ming Yang Smart | Tengda Construction vs. 159681 | Tengda Construction vs. 159005 | Tengda Construction vs. Loctek Ergonomic Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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