Correlation Between Nanxing Furniture and Cultural Investment
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Cultural Investment Holdings, you can compare the effects of market volatilities on Nanxing Furniture and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Cultural Investment.
Diversification Opportunities for Nanxing Furniture and Cultural Investment
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Cultural is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Cultural Investment go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Cultural Investment
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 0.73 times more return on investment than Cultural Investment. However, Nanxing Furniture Machinery is 1.37 times less risky than Cultural Investment. It trades about 0.03 of its potential returns per unit of risk. Cultural Investment Holdings is currently generating about 0.01 per unit of risk. If you would invest 1,355 in Nanxing Furniture Machinery on August 31, 2024 and sell it today you would earn a total of 164.00 from holding Nanxing Furniture Machinery or generate 12.1% 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. Cultural Investment Holdings
Performance |
| Timeline |
| Nanxing Furniture |
| Cultural Investment |
Nanxing Furniture and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Cultural Investment
The main advantage of trading using opposite Nanxing Furniture and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Nanxing Furniture vs. Cultural Investment Holdings | Nanxing Furniture vs. Gome Telecom Equipment | Nanxing Furniture vs. Bus Online Co | Nanxing Furniture vs. Holitech Technology Co |
| Cultural Investment vs. BYD Co Ltd | Cultural Investment vs. Agricultural Bank of | Cultural Investment vs. Industrial and Commercial | Cultural Investment vs. China State Construction |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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