Correlation Between Nanxing Furniture and Zhongzhu Medical
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Zhongzhu Medical Holdings, you can compare the effects of market volatilities on Nanxing Furniture and Zhongzhu Medical 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 Zhongzhu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Zhongzhu Medical.
Diversification Opportunities for Nanxing Furniture and Zhongzhu Medical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and Zhongzhu is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Zhongzhu Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongzhu Medical Holdings 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 Zhongzhu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongzhu Medical Holdings has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Zhongzhu Medical go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Zhongzhu Medical
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.45 times more return on investment than Zhongzhu Medical. However, Nanxing Furniture is 1.45 times more volatile than Zhongzhu Medical Holdings. It trades about -0.18 of its potential returns per unit of risk. Zhongzhu Medical Holdings is currently generating about -0.41 per unit of risk. If you would invest 1,618 in Nanxing Furniture Machinery on October 13, 2024 and sell it today you would lose (205.00) from holding Nanxing Furniture Machinery or give up 12.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Zhongzhu Medical Holdings
Performance |
| Timeline |
| Nanxing Furniture |
| Zhongzhu Medical Holdings |
Nanxing Furniture and Zhongzhu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Zhongzhu Medical
The main advantage of trading using opposite Nanxing Furniture and Zhongzhu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Zhongzhu Medical 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 Zhongzhu Medical will offset losses from the drop in Zhongzhu Medical'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 |
| Zhongzhu Medical vs. Shantui Construction Machinery | Zhongzhu Medical vs. Sinomach General Machinery | Zhongzhu Medical vs. Weichai Heavy Machinery | Zhongzhu Medical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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