Correlation Between Nanxing Furniture and Senci Electric
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Senci Electric Machinery, you can compare the effects of market volatilities on Nanxing Furniture and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Senci Electric.
Diversification Opportunities for Nanxing Furniture and Senci Electric
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Senci is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Senci Electric go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Senci Electric
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.26 times more return on investment than Senci Electric. However, Nanxing Furniture is 1.26 times more volatile than Senci Electric Machinery. It trades about 0.08 of its potential returns per unit of risk. Senci Electric Machinery 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. Senci Electric Machinery
Performance |
| Timeline |
| Nanxing Furniture |
| Senci Electric Machinery |
Nanxing Furniture and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Senci Electric
The main advantage of trading using opposite Nanxing Furniture and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric'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 |
| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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