Correlation Between Nanxing Furniture and China State
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By analyzing existing cross correlation between Nanxing Furniture Machinery and China State Construction, you can compare the effects of market volatilities on Nanxing Furniture and China State 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 China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and China State.
Diversification Opportunities for Nanxing Furniture and China State
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and China is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State 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 China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and China State go up and down completely randomly.
Pair Corralation between Nanxing Furniture and China State
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 4.21 times more return on investment than China State. However, Nanxing Furniture is 4.21 times more volatile than China State Construction. It trades about 0.2 of its potential returns per unit of risk. China State Construction is currently generating about -0.03 per unit of risk. If you would invest 1,371 in Nanxing Furniture Machinery on September 12, 2024 and sell it today you would earn a total of 323.00 from holding Nanxing Furniture Machinery or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. China State Construction
Performance |
| Timeline |
| Nanxing Furniture |
| China State Construction |
Nanxing Furniture and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and China State
The main advantage of trading using opposite Nanxing Furniture and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.| Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Bank of China | Nanxing Furniture vs. PetroChina Co Ltd |
| China State vs. Xilinmen Furniture Co | China State vs. Nanjing OLO Home | China State vs. Iat Automobile Technology | China State vs. Fiberhome Telecommunication Technologies |
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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