Correlation Between Nanxing Furniture and China Zheshang
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By analyzing existing cross correlation between Nanxing Furniture Machinery and China Zheshang Bank, you can compare the effects of market volatilities on Nanxing Furniture and China Zheshang 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 Zheshang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and China Zheshang.
Diversification Opportunities for Nanxing Furniture and China Zheshang
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and China is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and China Zheshang Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Zheshang Bank 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 Zheshang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Zheshang Bank has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and China Zheshang go up and down completely randomly.
Pair Corralation between Nanxing Furniture and China Zheshang
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 5.43 times more return on investment than China Zheshang. However, Nanxing Furniture is 5.43 times more volatile than China Zheshang Bank. It trades about 0.16 of its potential returns per unit of risk. China Zheshang Bank is currently generating about 0.17 per unit of risk. If you would invest 1,362 in Nanxing Furniture Machinery on September 14, 2024 and sell it today you would earn a total of 256.00 from holding Nanxing Furniture Machinery or generate 18.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. China Zheshang Bank
Performance |
| Timeline |
| Nanxing Furniture |
| China Zheshang Bank |
Nanxing Furniture and China Zheshang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and China Zheshang
The main advantage of trading using opposite Nanxing Furniture and China Zheshang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, China Zheshang 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 Zheshang will offset losses from the drop in China Zheshang's long position.| Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Kweichow Moutai Co | Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. China Mobile Limited |
| China Zheshang vs. Heilongjiang Transport Development | China Zheshang vs. Sino Platinum Metals Co | China Zheshang vs. Shandong Huifa Foodstuff | China Zheshang vs. Tianshan Aluminum 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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