Correlation Between Nanxing Furniture and Sichuan Teway
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Sichuan Teway Food, you can compare the effects of market volatilities on Nanxing Furniture and Sichuan Teway 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 Sichuan Teway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Sichuan Teway.
Diversification Opportunities for Nanxing Furniture and Sichuan Teway
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Sichuan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Sichuan Teway Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Teway Food 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 Sichuan Teway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Teway Food has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Sichuan Teway go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Sichuan Teway
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 1.3 times more return on investment than Sichuan Teway. However, Nanxing Furniture is 1.3 times more volatile than Sichuan Teway Food. It trades about 0.02 of its potential returns per unit of risk. Sichuan Teway Food is currently generating about 0.0 per unit of risk. If you would invest 1,456 in Nanxing Furniture Machinery on September 1, 2024 and sell it today you would earn a total of 63.00 from holding Nanxing Furniture Machinery or generate 4.33% 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. Sichuan Teway Food
Performance |
| Timeline |
| Nanxing Furniture |
| Sichuan Teway Food |
Nanxing Furniture and Sichuan Teway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Sichuan Teway
The main advantage of trading using opposite Nanxing Furniture and Sichuan Teway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Sichuan Teway 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 Sichuan Teway will offset losses from the drop in Sichuan Teway's long position.| Nanxing Furniture vs. New China Life | Nanxing Furniture vs. Ming Yang Smart | Nanxing Furniture vs. 159681 | Nanxing Furniture vs. 159005 |
| Sichuan Teway vs. Nanjing Putian Telecommunications | Sichuan Teway vs. Shenzhen Hifuture Electric | Sichuan Teway vs. Tianjin Realty Development | Sichuan Teway vs. Shenyang Huitian Thermal |
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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